When enabled, this turns an object or group into a holdout matte. It affects primary rays only. The matte color is always black, and the opacity of the object is preserved. Shaders will not run on the object anymore and it will output all-black (including the alpha), except if the opaque parameter is off, in which case shaders will be run just to compute the opacity. Note that even AOVs output by its shaders in this case will be black.
The Matte attribute does not matte out the AOV contributions of built-in AOVs such as P, N, and raycount.
There is also the option to create a matte with a Matte shader.