I know what it does, but I'm not sure I can explain it since I haven't had my T-verb that had the feature now for almost a year..... but I'll try.
Basically you have an orange channel and a red channel and it will stay that way with the switch in the middle position, but if you flip it one way you will basically have 2 orange channels and if you flip it the other way you will have 2 red channels. I had it to where I had two orange channels, so I had clean on channel 1 and vintage on channel 2, even though the switch said "modern" it was a cloan of the vintage.
I don't know if it is two different power amps or what, but the red channel is voiced more agressivly with more highs and lows where the orange has more mids and when you flip that switch it either mellows out the amp or makes it more agressive. I think it only applies to the distortion modes (vintage or modern) but I could be wrong.
Did that make sense?