This button changes the display of binary attribute values, or values which data type is Octet String or another hexadecimal format. Remember that values are shown not only in the attribute list, they could also appear in list columns in the object list panel:
As you can see in the screenshot, LEX tries to show binary data as ASCII characters, this is because many directory servers store text data in binary attributes. If you want to see the real binary data in hexadecimal output, you can press the Show hex output for hex values button :
You could change the binary attribute name display also with the menu option View - List output Settings or with the menu option View - Attribute output Settings. In attribute lists you can also switch the display for a single binary attribute row with the context menu (right mouse click) and the option Show Data as Hex Values / Show Data as ASCII String.