It's not stupid, its actually, probably, the best question u could ever ask.
basically, it "limits the dynamic range of the signal"
so lets say, your school band teacher says "your song should have more dynamics" then he's asking u to not be playing at the same volume...a.k.a, robotically
in essence, u can level off volume spikes, make the quieter notes more consistent with the rest of your playing, increase sustain. Those sort of things.
so basically, it can help your playing sound more consistent.
the really, really good question, is how to set one up.
personally, I just set every parameter very conservatively, i find that it works just fine that way.
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