Teachers can create a custom canned response for exercises from the Help" tab for a given student exercise. At the bottom of the Help tab is a link to "+ add custom canned response".
Once they have created the custom canned response, that response will be available from the Help tab or Fast Grade for any exercise of that type. So, if a teacher creates a custom canned response on The Two Towers, it will be available anytime the teacher is grading The Two Towers.
Custom canned responses are tied to individual exercises, so that custom canned response the teacher made for The Two Towers won't be available for Breakout etc.