Significance of jerk limits

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Can someone please help me where the jerk limits are used in the planning pipeline ??

If with "planning pipeline" you are referring to MoveIt using the default OMPL planner, then the jerk limits are not used at all there. In fact, no limits other than position limits are used, as OMPL is a kinematic planner only and does not take dynamics into account (at least: not as it's used by MoveIt) and MoveIt setups the planning (ie: search) space for OMPL using the joint limits.

Limits on the dynamics are only taken into account at the end of planning pipeline, namely the "time-parameterisation". OMPL delivers a path, time-parameterisation turns it into a trajectory.

There are currently three options for time-parameterisation provided with MoveIt:

1. Iterative Parabolic Time Parameterization (IPTP)
2. Iterative Spline Parameterization
3. Time-optimal Trajectory Generation (using TOTG by Tobiaz Kunz (paper)

There is some discussion on the various options on the Time Parameterization page in the MoveIt tutorials.

Afaik, none of those take jerk limits into account.

I tried incorporating jerk limits in my config file but didn't see much change in the trajectory.

Afaik, that is to be expected. See my earlier comments.

Note that there are planners that could take dynamics into account while planning (something like STOMP or CHOMP, optimisation based) but those are by default not used and they might require some additional setup and configuration.