It raises the volume dynamically to match that of other tracks. The idea is so that you won't have to constantly adjust volume while playing songs mixed at different levels.
In practice, it just boosted the volume so loudly for me that it was completely distorted. I usually listen to my music at 10/30 with it off, and 4/30 was about as high as I could turn it with the feature on.
Ideally you'd rather have it lower volume of the loud tracks rather than raise it for the soft ones, because you can lose quality if you boost it enough that there's clipping.
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