I'm unsure tbh. I just assumed it brought me to the very last post of the thread.
Edit: I just tried it. It doesn't bring me to the last post that I read. Sometimes it jumps to the newest topic in the thread (which is what I thought it did), sometimes it jumps me to a random point earlier in the thread.
I didn't even know "Last Post" was over on the left, so Thank You. I tried it on a few threads and it always takes me to the last post, regardless if I've read the thread before.
Win 7 + Chromium in case that matters.
Edit: Just tried it with Chrome and had the same thing you're experiencing happen once or twice.
Edit2: It just happened with Chromium, which only makes sense lol. FWIW, it only seems to be threads I've never read before.