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How exactly does the track component on/off button work with regards to System performance?

the sinner

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The on/off button on a track mutes the regions on that track, so that during playback, their content is not routed to the channel strip assigned to the track. Turning the track off does remove the load on the CPU during playback because when no data is routed to the plug-ins on the channel strip, they're not using CPU resources. However if you route data to the plug-ins some other ways (such as from an external MIDI keyboard or another MIDI software) then the plug-ins are using CPU resources. 

You can Option-click the On/Off button to truly deactivate the plug-ins which are now never using any CPU resources no matter how you route data to them. 

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