Pick a translucent foreground color and a background color, and the tool composites them into the equivalent solid hex color.
The solid color you would see when a foreground with a given alpha sits over a background: out = fg×alpha + bg×(1−alpha) per channel.
Some tools and formats need a solid HEX. Flattening tells you the exact opaque color an overlay produces on a known background.
An alpha of 0.5 blends the foreground and background equally, producing the midpoint color between them.