Copy of my reply on Discord:
Input lag reduction changes your input to be executed 20 or 40 milliseconds earlier.
This is purely personal preference and has nothing to do with your ping.
A higher input lag reduction can come at a slightly bigger performance cost (FPS), basically every time you press or release a button the game has to go back in time 1 or 2 ticks to apply the change and then re-simulate the game to the current time.
This extra performance cost should be very minimal either way because this rollback and re-simulate process is done all the time when receiving inputs from other players either way.
Something to note is that with 60 frames per second your screen updates every 16.67 milliseconds so if you press left at the start of a frame it still takes 16ms before you actually see the change. With a lower FPS this time obviously increases.
And then there’s a lot of other aspects that can cause input delays such as your keyboard polling rate and general setup and settings of your GPU such as gsync.
This is also why I’ve set the default at -20ms.
To give some more context about the multiplayer networking:
Basically your client (what you see) runs a simulation of the game and all your inputs are applied immediately.
The server also runs a simulation of the game and will verify your input to make sure you can perform the given input but in 99% of the cases you can and no correction is needed so when you receive a response from the server that your input was valid then nothing needs to be done because you already simulated it. Therefore the input lag reduction is not impacted by your ping.
In this visualization you can see player 2 having a high ping of 240ms and an input lag reduction of 40ms but as you can see in the graph there is not really any relation with the networking and the input lag. Note that this visualization is missing a lot of details and is not a correct representation of the exact networking but it helps to visualize how it kind of works.
