I am not certain, but here is my understanding and experience with what it does…
ASIO Guard looks ahead and pre-calculates audio where it can. The amount that it looks ahead is determined by the ASIO Guard setting. That is why when a fader or knob is moved, there is a delay in seeing its effect, because there will be no effect until the audio gets past the part that was already calculated when the knob or fader was moved.
I think this is independent of the real-time physical input/output latency.
Example… The other day, I was doing some recording on a project with some recorded guitar and some VST instruments. The ASIO Guard was on the highest setting. During recording, I put the audio card latency to the lowest setting. The project still ran very smoothly because the instrument tracks and other, non-monitored, tracks are being pre-calculated (by the amount in the ASIO Guard setting). I also had no noticeable latency on the guitar as I was recording (just a few .ms as the audio card latency is reporting.
Bottom line is that I don’t think the ASIO Guard latency is “in addition” to the audio card buffer latency. It is a different animal. It is how much Cubase looks ahead for pre-calculation. This is based on my understanding from the manual and videos here on the website and my own usage experience but I may have it wrong…