Dither is a final-export step that makes bit-depth reduction less distorted.
Definition
Tiny noise that prevents rougher errors
Dithering adds very low-level noise before reducing bit depth. That noise randomizes quantization errors so quiet fades and tails sound smoother than a simple truncation.
The point is not to make the file quieter or louder. It is to make the last bits behave more musically when moving to a lower-resolution format.
Timing
Dither only at the last fixed-bit export
Dither should usually happen once, at the final conversion to a lower fixed bit depth such as 16-bit. Adding it repeatedly raises the noise floor for no benefit.
If you are exporting 24-bit or 32-bit float for mastering, leave dithering to the mastering or final delivery stage.
Metering
Check the export, not just the session
After dithering and export, reopen the delivered file and check that peaks, loudness, and fade tails still behave as expected.
Meter Core helps confirm the final file did not gain unwanted overs while the bit-depth conversion was handled cleanly.