"This bit of this file is mapping a part of a virtual filesystem known to be empty. Its contents do not matter."
Currently, the backing file still takes up space on the host's filesystem when that is done. It need not. (Possible downside: files with huge numbers of holes scattered through them had a historical propensity to get enormously fragmented, but for VM filesystem images this is probably completely unimportant, as the 'fragmentation' is going to be precisely in line with actual *files* in the contained FS.)