AFAIK this just adds delay to individual tracks to prevent plugins from making them go out of sync. It's very handy, but I don't think there is any way to actually reduce latency once it's in the signal chain, DAW or otherwise, other than removing the delay-causing process.
IMO latency as short as 20-50ms can throw off a performance / recording, and depending on your skill level, might be a problem for gaming. But 100-200ms can be acceptable for video depending on your personal sensitivity to it. For pure mixing / mastering I think latency is generally not a showstopper but can be annoying.
For listening or even movies I'll tend to use the phase linearization option if there is one, but I would turn it off if I were recording a performance of some kind.