The following illustration shows soft and hard thresholding operations. The soft thresholding operation sets the coefficients smaller than the threshold to 0 and shrinks the others toward 0. The hard thresholding operation sets the coefficients smaller than the threshold to 0 and keeps the values of the other coefficients.
The hard thresholding operation keeps the amplitude consistent before and after denoising but might include some Gibbs oscillation at the edges. The soft thresholding operation can keep the continuity of the coefficients and the smoothness of the reconstructed signal but might reduce the signal amplitude.