I think the setting means engine rpm. It becomes noticeably less noisy with lower rpm. So I guess the loudest is during the takeoff and landing phases.
Anyway, I do not get it either why we cannot have similar sound level across all add-ons in the sim (by similar I mean slightly louder in airplanes that actually are louder in RL). That would make the most sense for the end-user.
We can always just decrease the engine sound in the game settings but that will decrease external and internal sounds. Some developers program their aircraft to have two very different levels for internal and external and that I think it absolutely the worst move. You adjust one sound level to be comfortable and when you change the view, the problem comes back (either too high or too low). In this way there is no way to adjust the sound to a comfortable level for the user. It really baffles me that some devs think this is the way to go.