The deduction reduces your effective tax rate as calculated for DA-1 purposes. It’s roughly
overall tax rate = total income tax amount / taxable income
tax rate for wealth income = overall tax rate * taxable wealth income / gross wealth income
taxable wealth income = gross wealth income - wealth income deductions
Wealth income deductions include ‘Kosten für die Verwaltung des beweglichen Privatvermögens’ but also interest for loans (including mortgages).
The overall tax rate is actually based on a special table, at least in ZH, so the above is just an approximation. Importantly, the marginal tax rate is not relevant for this.
I.e. your tax rate for wealth income may be below 15% even if your overall tax rate is above 15%. Which means that you only get a partial tax credit for US WHT. This is only relevant if your overall tax rate is already close to 15% (or below) or you have relatively large deductions (such as a mortgage or margin loan) or a low average dividend.
For the typical passive investor with a 2% gross dividend, it means that your overall tax rate needs to be around 18% or higher instead of just 15% to get the full tax credit for US WHT.
The above is only an approximation to explain the effect of the deduction. The actual calculation is different (relevant when you have a mix of DA-1 and other assets). More details are in this thread: DA-1 refund denied