By clicking this button you activate/deactivate Legato. Legato in Malström is unique in that it allows you to control whether the sound is monophonic or polyphonic by using your playing style:
If you play legato (hold down a key and then press another key without releasing the previous), the sound is monophonic.
Also note that the pitch changes, but the envelopes do not start over. That is, there will be no new "attack".
If you play non-legato (separated notes), with polyphony set to more voices than 1, each note will decay separately (polyphonic).