With Grace Period, you give the customer the possibility to continue using your app even when the payment fails.
Grace Period deals only with Billing Retry status, so please read our article about Involuntary Churn before reading this for it to make sense.
As soon as Apple is unable to process a subscription renewal payment, it flags the user as being in the “Billing Retry” period and tries to process the payment for 60 days after which the subscription is canceled. If you haven’t activated the Grace Period feature in Apple, the user stops being able to use the app as soon as (s)he is flagged because (s)he is just not paying anymore.
If and when Apple succeeds in processing the payment, the user continues to be a subscriber and you receive your payments based on that new process date.
With Grace Period, you give the customer the possibility to continue using your app even when the payment fails: the Grace Period depends on your package (6 days for weekly, 16 days for monthly and longer packages). The advantage for the user is obvious and this is why Apple offers such a feature. The advantage for the developer is more tricky and happens only if and when Apple succeeds in processing the payment while in Grace period: when this happens, Apple considers the days of the Grace Period during which the user continued to enjoy the benefits of your app as “billable” and renews the subscription accordingly.
As a result, based on your Billing Retry ratios and depending on how quickly they are recovered from this status, activating the Grace Period feature could have an important impact on your proceeds without any extra cost (assuming leaving the app accessible to a user has only a marginal cost to you).
To summarize, The Grace Period is a period of time nested in the Billing Retrial status during which the customer continues to enjoy the benefits of your app despite a payment processing issue.
In any case you don’t have to try and figure out all these ratios and numbers, madduck insights will point out any opportunity about Grace period with its potential impact to your bottom line.