crude example
111111111111111011111111 = 16776959
111111111111111001111111 = 16776831
two different 24 bit voltage levels but when truncated to 16 bit
1111111111111110 = 65534
1111111111111110 = 65534
both 16 bit voltage levels are equal
if we take a couple of the least significant bits in the 24 bit sample and randomize them (by adding noise to them) before we truncate. we end up with after truncating
1111111111111111 = 65535
1111111111111110 = 65534
two different 16 bit voltage levels.
over time the added noise will smooth out the truncation error/distortion and sound more pleasing to the ear.