"I am using quad uart TL16C754B."

So this isn't actually an 8052 question then, is it? Strictly, this is off-topic.

"Software Flow-Control" is so called because it is usually handled in software: your software has to detect the presence of the X-OFF and X-ON characters in the datastream and act upon them accordingly.
because this is happening in software, there can be a significant delay (many character periods) between the receiving end sending an X-OFF and the transmitting end actually recognising it and stopping the transmission. This is the principal disadvantage of software flow-control.

Another disadvantage is that you can't send binary data over such a link - because if the binary values of X-ON or X-OFF happened to occur in your binary data (as they most likely would), they would be interpreted as X-ON and X-OFF and lost from the data stream!

However, you seem to have a UART which can perform the so-called "software" flow control function in its hardware. This should significantly mitigate the speed disadvantage of "software" flow control (though not the binary data problem).

"character Xoff(0F) and Xon(0D)."

The X-OFF character is usually DC3 (Ctrl+S; 0x13), and X-ON is usually DC1 (Ctrl+Q; 0x11).

"what is the advantage of software flow control"

The advantage is that you don't need to provide any additional wires & hardware to carry separate flow-control signals; all you need is the basic 3-wire RxD, TxD and SGND.

Telecoms types call this "In-Band Signalling"