In the days of old when knights were ........
The ADF had several mode selection positions, OFF, ADF, ANT, LOOP, BFO.
ADF - does what it says on the tin. Automatic Direction Finding.
ANT - enabled only the sense ANTenna thus removing the annoying beat interference that the loop induced and allowing clearer beacon identification (or a nice clear signal on radio 4 or whatever)
LOOP - enabled only the loop antenna. which could then be slewed (and on the realy old ADFs it actually did move the loop aerial. On the newer units it did it electricly)
BFO - Introduced a beat note of 1000hz to enable identification of CW only stations.
The old SOP was to identify the beacon first using ANT and then having established it was the right one select ADF (at max beacon range the interference between loop and sense signals could make it difficult to hear the beacon ident). The loop mode was used in the event of a sense aerial failure (remember they used to be a bit of wire on the top or under the a/c. Very handy for drying wet shirts and trousers) and could be used to manually DF the beacon (it would be along a line at which the ident signal could NOT be heard).
From an engineering point of view ANT and LOOP were very useful diagnostic tools as ADF defects can be very difficult trouble-shoot.
Technically the ADF combines both loop and sense signals to determine the direction of a radio beacon. The loop ant determines the line along which the beacon lies and the sense ant 'resolves the ambiguity' (i.e. tels you whether it is in front or behind you) by only pointing in the dirction in which the phase relationship between the two signals is 90 degs.