Dithering

Dithering uses patterns of available values to approximate values between them. It can make transitions look smoother when the destination format cannot directly represent every intermediate tone. Apple’s dithering explanation

Think of it as a way to reduce visible steps, rather than an increase in the format's precision. The number of bits in the destination has not changed.

BetterDisplay exposes a system dithering option where supported. This is separate from choosing bit depth, and its setting is not a measurement of processing inside the physical panel.

See Color Mode for the related option.