. . . . Why does it say 'Lower quality' to the left of the slider . . . .
The lower quality/higher ratio value, of the slider affects the degree of compression, when over to the far right (0) the video is lossless (uncompressed).
Subtle changes in the settings can have larger effects than would be expected eg Handbrake opts for a setting of 22, the link @PATIENT-X posted shows a value of 20 - this may appear to be a small change - 2 units, however it can have a visible effect improving the image quality - though at the expense of a bigger file size.