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Well it's more like an unwritten rule in sound engineering.
Spectral (like EQ) and dynamic effects go on inserts, temporal effects go on auxes.
Mainly see it this way (few exceptions of course) :
Inserts, the name explains it, is in series with the signal path. Why spectral and dynamic effects on inserts? Think of it as effects that literally change the signal. Temporal effects on the other hand "add" something to the original signal. It's only normal you use a parallel path (aux) for that instead of a serial (insert) path.
It's also a convenience thing. Putting two signals together in an eq or a compressor, will yield completely different results as putting them in separately. Doing that with a delay or reverb won't (you'll basically put them in the same space). So for saving money and gear, you can use a compressor/eq/limiter/... per channel, but you only use a couple of reverbs/delays on auxes. Of course if you want to put every track in it's own space, using lots of reverbs/delays will be more versatile, but more expensive too, and generally avoided.
Software seemingly changes all that, but you must see it as a continuation of the old analog days. I'm sorry to say, and I don't want to blame any of you, but most home studio producers have no idea what half of the terms and features of their gear mean and do. They haven't got all the history behind it.
Nowadays with computers, I see lots of people putting a reverb or delay (or both) on every separate channel via inserts. And then they start to ask for functions like freeze, because their comp can't handle it anymore. My advice, unless you have a very good reason to, keep it working the old way. Spectral and dynamic effects on inserts, temporal effects on auxes. Will save you much trouble, and the result is usually the same, for less cost (monetary, or cpu power).
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