The wall mounted transmitter box in the garage has a number showing on it. It might say “08”, or another number. When you press the “DOWN” button, the number will decrease whilst the “UP” button will increase the size of the signal field.  As the number changes, so does the size of the signal field accordingly. We use these buttons to fine-tune the signal to achieve the desired field range to meet the containment goals.

The signal radiates outward in all directions from the wire. (The signal going down and away are insignificant to this conversation, so let’s ignore it.) The collar is programmed to pick up and respond to the signal once it reaches a minimum threshold level of magnetic density. The result of this science is that the collar “Hears” or “Sees” the signal like it is a hump over the ground. The collar will not respond to a signal that is too weak. If it is too weak, the dog will walk out. Think of shooting an arrow over the prairies of KS at 1000 ft above sea level towards California. If the altitude is not adjusted, it will intersect the mountains in Colorado. If we lower the mountains to 800 ft, the jet will clear them. The collar is the arrow. The mountain range is the fence signal. The arrow will be unswayed over the plains of KS because the mountains are too far away. A weak signal could mean it is turned too low or is physically too far away to matter.

The transmitter on the wall must broadcast strongly enough to allow the signal and collar to intersect a distance no further away than your dog’s neck level. This is generally programmed to be about 5 ft for a larger dog. Therefore, a two or three-foot signal may be too small for the collar to pick up and therefore unachievable. But a well-trained dog may respond well to 4 and possibly 3 ft. Experimentation will prove what you can do.  
I hope this makes sense. Regardless of the physics behind it, the least you can do is to experiment and monitor her behavior with the new setting.