In this circuit, audio fed to the control channel is amplified and rectified by Dl and D2. This dc level activates LED D3 via Q2. The light from D3 causes R9, a light-dependent resistor to decrease resistance. As Rll (audio gain) is set higher, more audio is present at the output of Ql. Audio fed into J2 is shunted to ground via R9 and less of this audio appears at J3.
Therefore, audio at Jl controls the audio level fed to J3 from J2 andjproduces a fade effect.