That is how I read it too Zombie, in Cine4home's review of the HW50 it did reduce the light output and a slight increase in contrast over some modes. The only issue (for me) is that it doesn't seem to reduce the black level in the same way as using the manual iris would (and how it does on the JVC). You get slightly better contrast using this mode, but due to the reduced peak white level, you don't get the contrast range that you might if the black level dropped by the same percentage as the peak white. The more adventurous might like to experiment with service menu tweaks to see if the iris minimum setting could be lowered to improve black level in the dynamic modes as some have done on the previous '30 (and '95) models.
It's a shame that the Sony wouldn't fit in my room/throw/screen size as it seems a popular option to the JVC.