Light burn normally processes images that you import for engraving to match the dpi and size you tell it and to dither it. If you dither or otherwise process the image outside of light burn you don't want light burn changing anything. You can think of pass through as telling LightBurn to just use the image as is.
Technically, though, it applies a threshold. A threshold assigns each pixel as black or white based on whether it is above or below a threshold value. A dithered image already consists of fully black or fully white pixels, not a range of values like an unprocessed image, so the threshold does not affect these types of images. If, however, you use pass-through on a normal image, it will turn it into a black and white threshold image.
The image above was not processed prior to importing into LightBurn, then had pass-through selected. The result is the threshold image shown.