Right, so it will simply do its best to close any unclosed tag – that’s it. Nothing more.
As you can see if you look at the source code, all the function does is make sure to balance out the tags that might not be. It’s also explained in the codex. (“force_balance_tags” is the real function that does the work; “balanceTags” defers to it if the options or attributes ask it to)
Hope this helps!