it reduces the moment inertia by lightening, so the engine has to do all the work in one go instead of using some of the stored energy in the flywheel.
when launching you build your revs then drop the clutch, in a normal flywheel there is a huge amount of stored energy, this helps give a big burst of power to the wheels and gets you off the line faster but since it's a 'heavier' flywheel it will reduce acceleration as the engine is not only moving the car but spinning a heavy disc which is building up energy.
alternatively you have lightened ones, the lighter or indeed ones with less moment of inertia, wil let the engine rev up faster as less energy is used in spinning the flywheel to store kinetic energy, however on a launch there is less stored energy in the flywheel so less instant energy to move the vehicle, although when the engine has dropped revs due to the instant energy transfer it can accelerate the car faster as less of the engines energy is used to spin the flywheel and thusly less energy stored in the flywheel.

that was a long one lol!
basically makes the engine more responsive, can make idle less smooth.