Complete the feature.
For predictable results, the replacement surface should extend to
or beyond the boundaries of the solid model. If the replacement surface
does not extend to or beyond the part, the system attempts to extend
it so that the replace feature can be created. In this case, the feature
may fail due to invalid geometry or produce an undesirable result.
The References slide-up panel in the dashboard is shown below. Both
the surface to replace and replacement feature are listed.

The Keep replace quilt option, accessed in the Options
slide-up panel, enables you to choose whether the replacement surface
is consumed or kept. By default, the replacement surface used to create
a replace feature is consumed in the process (i.e., it is no longer
visible on the model nor can it be referenced by other features).