Cost Modifier is defined as "When the cost modifier value is non-negative the cost of moving over the NavMeshLink is equivalent to the cost modifier value times the Euclidean distance between NavMeshLink end points."
I'm assuming this value is subtracted from the assigned Area's cost?
I'm not sure how it's calculated in the background. The simplest explanation is that a higher cost associated to an area (such as 2/3/4/etc) means the nav mesh agent will then determine a "cheaper" area to cross unless it must cross the expensive area.