Here's an expample in modo: https://www.youtube.com/watch?v=I-4_U8ceIqM
Essentially, I think the tool works by looking at the average of the normals and adapting the edges or vertices to the area flow.
Something similar is the smooth vertex, but it doesnt smooth the vertex, it pushes the vertices in a way that follow the area flow:
If we take this as an example, let's imagine we remove the 3rd dot. If we then add back a dot, its position would be changed and placed into a straight line, breaking the flow. With the command "edit edge flow" on that point, we would have the position back to normal. This would work both on an area or on a single point.