Darken/Lighten adjust the L (lightness) value in the HSL representation of the color.

Saturate/Desaturation does the same for the S (saturation) value in the HSL representation of the color.

Adjust_Hue moves the hue of the color (H in HSL) around a 360 degree color wheel. (from 0 - 360)

https://en.wikipedia.org/wiki/HSL_and_HSV

If you look at how SASS handles colors under the hood, then yeah, that's how it does it.