It does a lot more than lower brightness and cap clock speeds, it also disables night-shift and screws with all of the background process and predictive fetching, etc which the OS does.
I guess it does, since it saves so much power compared to running without the battery-saving mode. Still, I haven't noticed anything not working as expected, in my daily use.
You would get much of the benefit without a special mode by disabling background app refresh, location services and periodic mail fetch.