This Book vs All Books
A series can hold a lot of cast. The This Book / All Books view decides how much of it you see. You'll find it in three places: as the Show only this Book checkbox in the Book menu in the bar at the top of the window, as a This Book / All Books toggle sitting right beside that same Book menu in Worldbuilding Mode, and as the This Book / All Books switch at the top of the Minipen sidebar (your worldbuilding notes beside your manuscript while you write). It's one global setting: flip it in any of the three and it changes what you see on Characters, Items, Locations, and the Minipen all at once. One note on capital letters: in this article, a Book means one book inside your series.
All Books (the default)
All Books shows your entire series cast: every character, item, and location, no matter which Books they belong to. This is the default, so when you start Book 2, nobody vanishes.
This Book
Switch to This Book and anything you haven't marked as appearing in this Book disappears from your lists (Penpoint calls this Presence; see Presence: Which Books a Character Is In). Nothing is deleted — they're only hidden, and switching back to All Books brings everyone back exactly as they were. Drafting Book 2 without Book 1's one-scene witnesses cluttering the page is exactly what it's for.
Tip: The checkbox, the Worldbuilding navbar toggle, and the Minipen switch are all the same setting: flip any one of them and the other two follow. You'll only see them in a series; a standalone book has nothing to narrow.
Note: The Notebook follows this view too: the automatic per-Book folders tuck away for the Books you aren't focused on. See Using Dedicated Book Folders.
This view also decides how Importance reads: one level in This Book, and in All Books each Book's level side by side once the Books differ. See Importance Across Books.
Following Links Across Books
In the This Book view, you can still follow a link (such as an @Mentions link, or a link in your character's Relationships Block list) to a character who isn't in your actively selected Book.
Penpoint flips the view to All Books so the page can show them, and you stay in the Book you were working in. The setting visibly flips and stays on All Books; switch it back to This Book when you're done.
Clicking a chapter or arc that belongs to another Book is different: those live inside their Book, so Penpoint switches you to it. You can switch back anytime from the Book menu in the bar at the top; see Switching Between Books.
The Timeline in a Series
In a series, the Timeline (the page that lays out your chapters in story order) always shows every Book's chapters; it's the one page built for seeing the whole series at once, so the This Book view doesn't narrow it. Clicking a chapter that belongs to another Book switches you to that Book.