Float vents the head to the rod on the boom cylinders, i.e. no pressure from the pump and no bleed to tank. That lets the boom 'float' as need be. Actually, it just eliminates any up or down force on the boom. Kubota uses the term float loosely. The curling (bucket) cylinder is still fully active, meaning you can tip it slightly forward if you're on a hard surface to skim. Too much, and of course, it digs in. Float is the safest way to drag level with the FEL as well. If you tip the bucket too far forward and do not go to float, there's a good chance you'll bend the curling cylinder rods. If you tip the bucket back slightly, in dirt it will start sliding on the surface and not cut at all.
To put it in float, just push (quickly) the joystick forward until you feel it click. To take it back out of float, just pull back on the joystick to raise the boom.
I typically just use the FEL to move large quantities of dirt, and use the box blade for leveling/grading. On occasion, I use float to drag dirt back into a hole I made digging a stump out or something similar.