Or do I not know what its used for.

Have my alert settings set to alet me when a new reply is posted in a thread I've posted in. Except when I hit unnotify (to stop receiving notifications from that thread) they keep coming.
 
Likewise if I haven't posted in a thread, and I hit notify, I won't receive any notifications.

Or is it just over-ridden by my alert settings?

-cordially yours
Confused Naoto