from what i understand time dilation makes it so it takes less time for you the player not the in game character. for example the drive from talos to Laurion in world it could take 2 mins in game but it would only take 30 second of real time
Each completion gives speed boost up to 3x. After that, each completion will give 7% less boost than the previous completion, but will also start giving time dilation. Once time dilation reaches 3x, it also loses 7% per completion.
It seems It comes up when you hit the soft cap, and speeds it up for in RL only so if it say takes 10Sec at your mods and you have dilation 2 it takes 5seconds but eats 10seconds of resorces