The traction circle is a graph that shows G-Forces in two dimensions:

1 - Longitudinal (Accel/Decel) shows how much the speed is changing.
2 - Lateral (Left/Right) shows how much lateral (duh) force is being applied to the tires.

It`s impossible to have maximum G-forces on both dimensions. You can`t have 100% lateral grip and 100% longitudinal grip at the same time. They can add up to 100%.

For example, you can have:
100% Longitudinal and 0% Lateral
50% Longitudinal and 50% Lateral
20% Longitudinal and 80% Lateral
And so on.

If you release the brakes too abruptly, you end up bringing that Longitudinal usage down from 100 without having enough time to increase the lateral grip. So without trail braking, you spend some time UNDER THE LIMIT, where you can have, for example, 0% Longitudinal Traction but only 30 or 40% Lateral Traction. This shows up in the circle as a dot UNDER the circle, away from the edges.

When you transition correctly from braking to turning, you remain closer to the edges of the traction circle, maximizing grip usage and improving laptimes.

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