I dive with the Atomic B2. It is not the same reg, but has the same knob with the same function.
The knob that you are referring to is the AFC (anti flow control) knob. Its purpose it not to make it easier or harder to breath from, it is to allow you to be able to control the pressure that is needed to "crack" the reg.
I dive with mine turned fully counter clock wise. If you find yourself swimming into a current and the reg starts to free flow because of the increased pressure on the face of the 2nd stage, by turning the knob clockwise (I usually go a half turn at a time) it will prevent this from happening.
I know that my answer is probably not the most technical but I hope that it answered your question.
You got a great little reg there, I have loved mine from day one.
OK. So I gather the Atomics normally do not freeflow regardless of the adjustment (except in the situations you describe) . This may have to do with the seat saver, since on the Oceanic when you put the reg away you want to turn the knob to remove pressure on the seat, while on the Atomic it's not necessary.
Adam
Maybe the video and text on this page will explain better. See the Automatic Flow Control video and click on "Patented Automatic Flow Control (AFC) on the bottom. The seat saver is a separate and unrelated function also explained on this page.
Atomic Aquatics Second Stage Regulator Design
Consider what happens when the regulator is out of your mouth and you jump in the water. If the second stage housing does not fill with water, water pressure can depress the diaphragm (like pressing the purge). Air will flow, often so fast that water cannot enter the housing to equalize the pressure, so it continues freeflowing until you fix it.
There are two uses of manual knobs and levers on second stage regulators. Some are adjusting knobs used to change the spring pressure on the seat. This can reduce cracking pressure to the point of freeflow, or increase breathing resistance so it is less likely to freeflow against a head-on current. Some levers or knobs also control a vane, venturi, or paddle to create turbulent flow. Some have both.
This link discusses the features in a little more detail:
http://www.scubaboard.com/forums/5336554-post8.html
What most people actually use the adjustable spring pressure for is to crank down the sensitivity so it does not freeflow when the regulator is out of their mouth most often a problem on an octo when entering the water or when you are exiting the water. The disadvantage is the adjustment range is pretty narrow so you may not notice the higher resistance. As a result, you have unnecessarily high inhalation resistance throughout the dive.
Atomic uses the AFC (Automatic Flow Control) to minimize this conundrum and set the cracking pressure/inhalation resistance to a predetermined optimum setting. Basically, a metal arm sits in front of the gas jet on the surface to cause turbulent flow at high flow rates. Turbulent flow forces pressure to slightly increase, acting against the inside of the diaphragm, so small pressure differentials do not cause uncontrolled freeflow.
Naturally this compromises the regulator performance near the surface, but a separate small diaphragm (node above the knob) activates the lever to automatically move it out of the way at some shallow depth where it is no longer needed. The knob is used to override the automatic setting, not change the spring pressure on the seat.
As Dry_Diver explained, forcing the AFC lever into the flow with the knob effectively reduces sensitivity to head-on currents, due to turbulent flow. Because the spring pressure is preset, maintaining the seat in optimum condition is more important than on a regulator where you can increase spring pressure to overcome seat wear. That is where the "Seat Saver" comes into play. The idea is all the time the regulator is not pressurized; the seat is retraced so it does not "take a set". Atomic engineers believe this keeps their regulators in better tune over a longer period of time. It certainly seams logical though I don't have enough personal experience repairing them to say.