Alright, here is how it works for those interested. Alt Feedback (sometimes called Secondary Feedback) may be used during the modes Overdub, Multiply, Substitute, and Stutter. Unlike version 2.x, there is not a way to selectively decide which modes use AltFeedback and which don't. If you enable it, they all use it.
Enabling AltFeedback is done on a per track basis and is off by default. To enable it, bring up the session editor, select a track, and show the Mixer page. Check the box labeled Alt Feedback Enable. Unless you check this box, the value of the Alt Feedback control won't do anything.
There are several improvements that could be made here. There could be a global default that applies to all tracks so you don't have to enable it for each track one at a time. It's a rather obscure feature that few people know about so it doesn't get any attention.
As for why you would want to use it, this goes back to the EDP where it was a popular performance technique. It allows you to "sculpt" your overdub by fading the edges in and out, or warbling the level randomly during the overdub. I think it was mostly used for "ambient" style looping, but it has other uses if you take the time to explore it.
The reason there is both primary Feedback and Alt Feedback, is because you often just want to park Feedback at 127 so the loop doesn't always decay, then use Alt Feedback only during Overdub. As soon as you leave Overdub mode, feedback returns to the primary feedback value of 127 so you don't have to remember to turn it back up when you're done. It's just a convenience. You can do the same things with primary Feedback but you have to always remember to return it to the desired default value when you're done with the overdub.