Clamping is basically a way of filtering out too-extreme values. Suppose you’re sampling the same pixel four times and end up with three full black values (zero), and one that’s, say, 10 000. Then the final value of the pixel is 2500. With me so far?
Now, imagine that you’ve set the clamp level to 1.0. What happens now is that the three samples that are zero, they stay zero. However, the single much-too-bright value will be clamped to 1.0 instead of 10 000, and the new average will be 0.25 instead of 2500.
This is a great way of dealing with the “fireflies” that can occur in rendering, but it does mean you A) lose most of your super-white dynamic range and B) you kill small bright details.
A good workaround for these problems is to set the clamp value to something greater than 1.0. If you clamp at, say, 5.0 instead then you can strike a much better balance between maintaining dynamic range and details, while still controlling some of the worst fireflies.