Closed, that knob chokes the return line from the 3point. Then the 3point will stay up indefinitely even with the lift lever moved forward.
You can feel that this takes the load off the engine, idling or driving around, when you have a heavy implement held off the ground.
There is a different, smaller knob (or t-handle) to slow the descent rate of the rear implement. On some models it is under the left side of the seat. The manual says the big knob should be full open or full closed, with the small one adjusted to where an implement glides down instead of crashing.