The vacuum advance holds the advance at a high point at idle and at cruse speed, steady throttle. When you step on the throttle the vacuum drops and the distributor gets retarded to the preset advance setting.
High advance under a load will produce engine knock but at steady throttle the engine can use extra advance for fuel economy.
When setting the timing with a vacuum dist. you remove the vacuum line and set the advance per engine manual specs. then reattach the vacuum line.