What the bit says
When GPC is on, the browser exposes a preference. Participating sites are supposed to treat that as an opt-out of sale or sharing.
It is not a request to hide your screen size.
What it does not switch off
Canvas readback, WebGL, fonts, and WebRTC do not consult GPC. A script can measure them whether the bit is on or off.
The bit itself is visible, so it is also a small fingerprint input. See how combinations work.
How it differs from Do Not Track
Do Not Track was widely ignored. GPC is a newer preference with legal weight in some places. Neither one is a private-browsing mode.
Private mode and GPC solve different problems.
Common questions
Should I turn GPC on?
Turn it on if you want participating sites to receive that opt-out. Do not expect it to anonymize the browser.
Is DNT the same switch?
No. DNT is an older header. Many sites ignore it. Leaving it on is a preference, not protection.