It adjusts the timing of the sub in relation to the timing of the rest of your speakers. The idea is to enure that the sound from all of your speakers reaches your listening location at the same time. The processors and amp in your sub can induce a delay. The subs placement also affects the timing. This subject goes well beyond my abilities to explain, hopefully another member with more knowledge on this subject will chime in.
I do know that if the sub is 180 degrees out of phase you can have cancelations, making your bass sound weak. The room plays such a big part with time domain that it can be tricky to get right.
Good news however is that if you have a helper you can get reasonably close. Put on some music that you're familiar with that has bass info and have your helper adjust the phase on the sub. You sit in the listening location and you should be able to hear the bass strengthen or weaken as the adjustments are made. If your sub has a toggle switch,0 or 180, it will probally be 0. If it has an adjustment knob, preferred, have your helper slowly turn it while you listen. This isn't the scientific approach, but it's a start. Hope this helps