How does the Set Timezone setting work?

I live in Australia and my site uses Brisbane (GMT+10) in Settings > General, which I would expect Newsletters to "inherit". Does it not?

For some reason, the documentation doesn't cover the Set Timezone setting and the on-page description talks about forcing the PHP and server timezone, which is a bit confusing.

What does this setting actually do and where does this coming into play?
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    @galbaras

    The "Set Timezone" setting attempts to correct the PHP time on your server/hosting to that timezone set in WordPress under the "Settings" section.

    In most cases you don't need to set this setting unless you notice that the timezone in the plugin doesn't seem to match.
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