The SOURCE system parameter was added during Pitchfactor development to give users options that tune the pitchshifting algorithms to the instrument, so SOURCE mostly only applies to algorithms that have some sort of pitchshifting in them. We've also used it to tune filters and/or EQ types or frequency ranges, e.g. the filter knob in MicroPitch comes to mind. The idea being that a bass player will want different EQ emphasis than a guitar player.
SOURCE does not however do any level compensation on the H9 (to adjust for active pickups, etc).