TCAS Targets
I can only answer based on the type I fly (DHC8 Q400), though I assume other types are the same in principle if not the specifics.
Our TCAS has three settings for the altitude bands it displays: NORMAL, ABOVE, and BELOW.
On NORMAL, it diplays targets 2,700 ft above and below our level,
on ABOVE, it shows 9,000 ft above and 2,700 ft below,
on BELOW, it shows 2,700 ft above and 9,000 ft below.
The display is also limited to 40nm in front, and only a few miles behind, and roughly 45 degress either side of the aircraft heading.
It doesn't matter if another aircraft has mode C turned on or off (or mode S for that matter), if our radar picks up a mode A squawk, and it's within the area mentioned above, it displays it on screen.
So if we are below 9,000ft with the mode set to BELOW every aircraft that passes below us with a mode A squawk, produces a TA and we get "TRAFFIC TRAFFIC" shouted at us by the ACAS. Very annoying. If the aircraft had mode C turned on, it wouldn't be considered a threat and the display would just show the aircraft as normal, with an indication of its level relative to us.
For that reason, we tend to use ABOVE from T/O to TOC, then switch to NORMAL for the cruise and only change to BELOW around initial approach. Or some people just leave it in NORMAL all the time.
Hope that's of some use.