See the Laplacian Smooth Modifier for details.
Laplacian smooth uses an alternative smoothing algorithm that better preserves larger details and this way the overall shape of the mesh. Laplacian smooth exists as a mesh operation and as a non-destructive modifier.
Geometry Smoothing versus Smooth Shading
Do not mistake this tool with the smooth shading options, they do not work the same! This tool modifies the mesh itself, to reduce its sharpness, whereas Set Smooth, Auto Smooth, ... only control the way the mesh is shaded, creating an illusion of softness, but without modifying the mesh at all.