Those Yamaha loudness controls are genius. I can't give you the specifics, but yes it would adjust the mid frequencies relative to the high and low frequencies. The way I was told to use it was to turn the volume up to where the music had the energy and slam I preferred, and if it that was too loud for me or the current conditions, turn the loudness control until it tamed the perceived volume.
The irony, I guess, is that the "Loudness" control actually decreases perceived loudness.