Has anyone sussed exactly what "original" dubbing does ?

The manual says it smoothes out edits - and it does this very well, reducing the frozen frame you get when you edit out an advert break for example, but it also seems to degrade the recording - the file size shrinks down to the level below that of the original recording - so if your original recording was in SP mode, your original dubbed copy shows as recorded in LSP, with a significantly smaller file size.

So what is it doing exactly ?? And is it worth the edit smoothing if you also lose quality ?? Hmmm....