Colors that fall within the gamuts of both input and output device are left unchanged. Colors that fall outside the gamut of the output device are usually altered to colors with the same lightness, but different saturation.
This method may reduce the total number of colors in the image considerably, if many different input colors map to the same output color.
But this matching method is useful when combining 2 output profiles for proofing. Since the color gamut of the proofing device (2) should be bigger than the color gamut of the destination profile (1).