Hi Chris,
As I observed it, the Critical Path ON will highlight all the processes which are connected using a GREEN / Red link, which means that the previous process should get completed successfully / fail for the connected process to start. Processes which are connected via gray link will be non critical path.
Green:
A link is displayed in green if the event is triggered when the preceding process is completed successfully.
Red:
A link is displayed in red if the event is triggered when the preceding process is completed with errors.
Grey Link: A link is displayed in gray if the event is triggered independently from the processing (successful or with errors) of the preceding process.
Logically when we create process chains we connect the critical processes which can affect the reporting by GREEN link, and non-critical processes such as text data load with Grey Link. So the Critical Path ON / OFF, as I've observed, indicates the same.
Hope this helps.