The F1 series LC is L2 only, in order for it to forward traffic between SVI from different ports, M1 will be needed.
Let's say traffic from VLAN X, port 1 of the F1 want to send traffic to VLAN Y, port 8 of the same F1. Traffic will be sent to the M1's port ASIC as a proxy forwarder, which means traffic from port 1 of the F1 will go to one of the M1's port ASIC and then send the traffic back to port 8 of the F1.
F1 Port 1 (VLAN X) -> M1 Port ASIC zz -> F1 Port 8 (VLAN Y)
In this case, M1's port ASIC zz is a proxy forwarder. Let's say Port 1 of the F1 want to send 5 GB traffic to Port 8 of the F1, the M1's Port ASIC will limited to 5GB of throughput for its own ingress/egress traffic.
When the documentation said 16 forwarders, it means it allows 16 M1's port ASIC to act as proxy forwarders (2x M1 LC). This number has been increased to 256 in the later release of NXOS.
HTH,
jerry
