It’s ‘ITERATIVE’ quantise… and it’s a lot more subtle than hard quantisation.
i.e. if you use a strict quantise it will nail your midi event exactly to the nearest quantisation point… i.e. to the nearest semi-quaver/16th note.
Iterative is different in that you can choose how ‘strong’ the quantise is or how ‘loose’ it is, it can be very helpful in helping to keep a more ‘human’ feel to your programming by not being so perfect… normal quantisation is great for stuff like trance or certain types of rock where groove and the natural ‘sway’ or swing/ebb and flow of a real world musical perfomer/band is not intrinsic to the type of music, but iterative Q is a better option if you just want to tidy things up a little bit without sacrificing the ‘feel’ of the take.
For instance… i program the majority of my drum tracks with the beat designer plugin… we do mainly jazzfunk/jazz/popfunk type stuff so obviously the drummer needs to be tight yet be able to swing and groove. hard quantisation will just kill dead any kind of groove so when i program with BD i always make sure that i put timing discrepancies in DELIBERATELY so it sounds more human, i even tweak stuff in the drum editor, also i will very often put a ramped tempo change to increases the speed in the lead up to a chorus and and slow it back down when it comes out of it because that is exactly what a bunch of live musicians do an should do as it adds to the feel and ‘urgency’ of a chorus.
Page 328 of your ‘operation manual’.
it’s a VERY useful tool! have fun with it