under the basin or bath taphole on the thread like large washer handy on thin sinks saves splitting the quality plastic nut
a top hat describes the shape,most are square with a pressed out square with a 1/2 dia cut out about 10/15mm high with a partial 3/4 core cut[accept 3/4 bath tails] hope you understand!larger area to the sink.
I would use one with certain types of taps on thin Baths (pressed steel) and Basins where the threaded part of the tap doesn't go all the way to the tap body which means the nut stops before clamping between the Bath/Basin surface.
Beware of the cheap plastic ones because after a while the one on the hot side splits resulting in a loose tap.We only use the metal ones now.