Chef Bo Friburg has a recipe for shortbread cookies using 25% rice flour, which lends a lovely crunch. It also calls for powdered sugar because of its water-binding property. Sorry, but the recipe is at work. I'll post the proportions tomorrow.
Cornstarch (or rice flour, which I use), helps to keep the cookies to stay sandy and tender because it doesn't have gluten in it. If an all-wheat flour dough gets overworked, it can result in a tough, dense cookie. Some recipes do use powdered sugar because of the cornstarch (or some other gluten-free starch like tapioca) already in it for the same reason.
Drat, will I ever learn not to hit the Add Answer button too fast? Butter. It consists of 75-80% butterfat, 18% water, and 2& milk solids. Proportionally speaking, that's actually a lot water, so to bind it up with some additional cornstarch is a good thing.
I use powdered sugar in shortbread cookies. It contains a bit of cornstarch to prevent the sugar from caking. It also very effectively binds with water, and shortbread cookies are all about butter. By adding a bit more cornstarch, you're guaranteeing that your cookies will be as dry as they need to be, verging on crisp.
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