I have wondered for a long time what this toggle does. It saves some changes but doesn't indicate what has changed.

It allows you to "mark" a card.
It is a kind of bookmark that allows you to find this card easily later.
The most common case is when a card needs editing, but you do not have time/tools to edit it right now, so you mark it, and you will fix the card when you are back home.
Why not edit the card right away, instead of just marking it? Examples:
Reference: http://ankisrs.net/docs/manual.html#editing-and-more
The button now looks like a star, like in web browsers:
Thanks for using AnkiDroid!