Ok...I checked it out with a stereo mix and two instances of Channel Tools (CT) in series (hosted in WaveLab) with Steinberg's Leveler plug at the end of the chain...
The first CT instance encodes Mid-Side and pulls the Mid gain down to zero.
At this point, the phase scope shows a horizontal line, indicating that the right and left channels are completely out of phase. You'll hear this as a kind of cockeyed stereo image when under headphones.
Let's keep the second CT instance disabled for the moment.
In the Leveler, there's a mono check box. When you check it (to sum the signal to mono), it goes silent. Hmm...
Now, enable the second CT instance and check the left phase button (or right...it doesn't matter which). Your signal comes back...the phase scope now shows a vertical line...and the "stereo" image is now in the center of your head instead wherever the out of phase thing put it.