Hi Shivangi,
The choice of the delta parameter determines the sizes of the HotNet2 subnetworks. I was unable to find the text that you quoted: "delta is calculated to ensure that the large subnetworks found in the actual network and not in the real network".
For each permuted network, HotNet2 finds the smallest delta such that the size of the largest HotNet2 subnetwork is less than or equal to L_max. HotNet2 chooses delta for the observed network as the median of these delta values across permuted networks. By default, HotNet2 repeats this procedure for L_max = 5, 10, 15, 20.
Please see Section 1.4.3 of the supplement to the HotNet2 paper for more details.
Best,
Matt