Regardless of issues with "Dispel effects", you wouldn't want to check this box. If it works as intended, if you have an effect, and then re-apply the same effect, if you have this checked, it would dispel the effect.
Using a keyword in Assoc Item 2, if you apply an effect that has a keyword, ie myKeyword, then anytime you apply a magic effect it replaces (if the magnitude is higher) the existing magic effect.
This part is important in the understanding of how PeakValue Modifiers work
If you have a magic effect where the Assoc Item 1 is MagicResist, and Assoc Item 2 is myKeyword.
You also have another magic effect where the Assoc Item 1 is DamageResist and Assoc Item 2 is myKeyword.
If you apply both magic effects, neither one will overwrite each other, because at least one of the Assoc Item criteria differs.
This method allows the same Assoc Item 1 value to be modified by multiple effects, but allows for unintended stacking.
For example, if you wanted to have to two types of magic effect which increased Magic Resist to stack together, but you didn't want each effect to stack by itself.
Still using Peak Value Modifier, you would set both Assoc Item 1 to Magic Resist, but you would give each magic effect a different keyword, so the 1st magic effect may have a keyword , myKeyword, and the 2nd magic effect has a keyword myNewKeyword.
By setting Assoc Item 2 on the 1st magic effect to myKeyword, and
setting Assoc Item 2 on the 2nd magic effect to myNewKeyword
both magic effects can be active on the target, but neither magic effect will stack multiple times.