I have been wondering this for a while now, and there hasn't been a very specific answer. When I last tried figuring out what this slider does I found this thread which I quote down below.
This is the best definition I can find of what Render Quality does, but it doesn't fully answer. Also it appears to conflict with what Vexx32 says a few lines lower about Shadow Cascades:
Can someone give a list of exactly what Render Quality does visually inside KSP and anything else pertinent? The wiki also doesn't give a good answer as it directs you towards reading Unity's documentation.
Many thanks and likes to those of you who can answer!