I’ll explain it at my best.
Suppose you play a Cmaj7 chord: C/E/G/B. The B will go to channel 1, the G to channel 2, E to 3 and C to 4.
Then there are strategies to handle less than 4 notes. usually “group high” or “group low”. The first strategy would mean that if you play C/E/G, the G will go to both channels 1 and 2, E to 3 and C to 4 (basically the 2 highest channels will play in unison). the second strategy will work exactly the opposite, by coalescing channels 3 and 4 in unison with only 3 notes.
The intent of this becomes apparent if you use a violin instrument on CH1, a viola on CH2, a cello on CH3 and a double bass on CH4. you can play “naturally” a section of arcs (or brass).
It’s a very cool feature of MidiDings. A regular midi split plugin will not work, because the split point(s) is not fixed.