Soft outlines introduce an element of abstraction to a piece without creating a cold/analytical feeling, as a hard outline might do.
Soft outlines clearly indicate the borders of each subject/shape, while the blurring of the outline might lend a feeling that these isolated components/characters are somewhat connected.
The outline is usually of a color and/or value that is distinct from the subjects/shapes found in the piece. The color(s) chosen for the outlines might have a symbolic meaning, and varied colors can be used around different subjects to allude to a distinct aura that each subject has.
Featured: Angelus Militans by Paul Klee.