The idea is basically a built-in audio compressor for streams that is toggled on and off. Setting the feature on would limit how loud the stream sound can get in ways that manually changing the volume button couldn't. Some streamers—especially smaller/newer ones—won't have an audio compressor, leading to stream sound blaring at max volume if there is a technical difficulty, too loud in-game mics, or other situations.
Here's a plausible example, you are watching a streamer's stream at 50% volume, and they are about to play a new game for the first time. The ingame volume settings are set to max, making the volume come through extremely loud and uncompressed.
In theory, this should help headphone and earphone users when experiencing these jarring situations. Thus, the website will be more accessible. As for a place for this toggle, it could appear when you click the gear on streams used to change quality.