diff --git a/pages/docs/reports/funnels.mdx b/pages/docs/reports/funnels.mdx
index 1481d092d4..991880810e 100644
--- a/pages/docs/reports/funnels.mdx
+++ b/pages/docs/reports/funnels.mdx
@@ -178,6 +178,17 @@ Further example use cases:
 
 Note:
 1. An exclusion step can be placed between any steps in the funnel. It cannot be the first or last step.
+
+Example scenario: The user performs (1) Event A -> (2) Event A -> (3) Event A -> Event B
+
+Exclusion Step: Event A
+
+We will count (1) and (3) as an entry into the Funnel. At (2), the user will drop off. So, there will be two entries (1)(3) into the Funnel, and one conversion (3). Hence, you cannot use the exclusion step to count each entry into the Funnel. 
+
+Example reports for reference from our demo dataset: 
+- [User activity](https://mixpanel.com/s/2it5gE) 
+- [Funnel](https://mixpanel.com/s/2CpCuq) 
+
 2. An exclusion step does not prevent users for qualifying into the funnel up until the exclusion step. If you want users who did a particular event at any point excluded, use a cohort filter.
 3. There may be any number of exclusion events between steps.
 4. Exclusion steps have the same [two second grace period](/docs/reports/funnels#how-does-mixpanel-handle-simultaneous-events) as other steps in the funnel.