This is how most of the game is played. In 3D Scroll Mode, you can maneuver your Arwing (or other vehicle) in any way, while you are always on a steady path forward at the same time.
This mode appears on a few levels, and it is where you can move your aircraft in all directions, inside the defined battlespace. Unlike 3D Scroll Mode, you can also U-turn. This mode of air gameplay is found on Fortuna, Katina, Sector Z, Venom (on the hard path), and there may be other times when you go into all range mode, like the easy boss on Corneria.