This tool will create vector point features from selected lidar. The point features will retain the attributes that the lidar points contained. Once the lidar data in converted to points, there is a different set of options that are available for digitizer operations and tools, and there is also more attribute flexibility. However the 3D point features are not optimized for large datasets and 3D rendering the way that a lidar format point cloud is.
This option is found under Create Point/ Text Features or Advanced Feature Creation in the Digitizer menu.
When selected, this option will generate a point feature for each selected lidar point. The new points will retain the attributes of the lidar points. After selecting this option the Modify Feature Info dialog will launch allowing you to select a style and layer for the generated features.
This option is available when a point cloud is loaded and points are selected.