Hi Davy
Thanks for using Wordfence.
The falcon engine is totally optional. As to whether or not it would clash with W3TC? I like to think of it this way. You wouldn't run two different antiviruses on one computer would you? Of course not. Because two antiviruses would step on each other's toes. The same goes with caching plugins. And since ours is optional, you can simply not enable it and use W3TC if you like. I don't believe I have ever heard of anyone having an issue with us and W3TC.
Yes, we could have made it a separate plugin but our dev team often finds really cool ways to do things while they are hashing things out for new features, etc. Falcon kind of came out of that. And we think its a great addition to the suite of things we offer. Best of all, it's free.
Did that help answer your question?
tim