FM multipath causes signal interference due to the receiver receiving the signal from multiple paths.
It’s not possible to completely fix it in software, but what exacerbates the problem is stereo separation, due to it increasing the bandwidth of the FM carrier, and we can control that in software.
The Multipath Mitigation control will reduce stereo separation of only frequencies with extreme stereo separation, with very high resolution (something like 1000 frequency bands), meaning an almost imperceptible, usually completely imperceptible reduction in overall stereo width, while tightly controlling the final RF bandwidth and reducing the risk of multipath-induced distortion. It doesn’t eliminate it though, we can only do so much, but it’s probably a worthwhile setting to keep on for most stations.
Low, Medium, High simply adjusts the aggressiveness with which it is applied.
Does it affect the audio quality? Almost imperceptibly in areas where signal strength is good, but definitely provides an improvement in areas where the signal may arrive at the receiver via multiple paths.