The rule used to move colours that do not fit when converting from a larger gamut to a smaller one.
ICC defines four: perceptual (compress everything to preserve relationships), relative colorimetric (keep in-gamut colours exact, clip the rest, map white to white), saturation (keep vividness for graphics) and absolute colorimetric (keep exact values including paper white, for proofing).
No intent is 'correct'. Photographs usually suit perceptual; logos and flat colour usually suit relative colorimetric.
A saturated sRGB blue converted to CMYK loses more under relative colorimetric than a gradient does under perceptual.
It decides whether out-of-gamut colours are clipped flat or everything shifts slightly to make room.