I apologize for the confusion.

It makes it so that the direction of the switch doesn't matter. Flipping the switch toggles to the off or on state that it's not currently in. I like to think of it as a three-way switch that you may already have in your house where up doesn't necessarily mean 'on' because there are two switches involved. The relay in the wall is the other switch. So if you have the light on in home assistant but you flip the switch, it'll turn the light off whether it was up or down. I hope I made more sense.

If my wifi goes out my switches function as normal too.

They work like regular switches. The flip of the physical switch sends the change back to home assistant to keep everything synchronicity.

I don't have any, though, so I'm not sure if you can set it to "up is always on", or if it ends up being a switch, so "whichever direction just changes the on/off state"