Sag is what happens when the demand for more power from the amp causes the supply votage to drop in response. This reduces headroom, so the attack of the note is more heavily distorted. The sustain is less heavily overdriven because it is lower level, thus demands less current, so the supply voltage goes up again.
The result is sometimes called "sweet sustain". It's kind of more dynamic tone response with less dynamic level output. Compression with mojo.
Power supplies using tube rectifiers did this automatically, because the tube diodes weren't fast enough to respond to sharply increased current demand. Silicon rectifiers are pretty much instantaneous in their response, so if sag is desired it has to introduced some other way.
Maybe the ReValver plugin would give you an idea of the effect, I think it lets you change rectifier types at will. Just an idea.
No dude, the "Bold/Spongy" switch just gives a set reduction in the supply voltage.
This is more like switching a Recto from "Silicon Diodes" to "Tube Rectifier".