What the gradient & banding test shows
Banding is what you see when a display cannot show all the steps between two tones, so a smooth gradient becomes a series of flat strips with visible edges. Cheap 6-bit panels do it badly; 8-bit panels showing 10-bit content do it subtly.
The ramp is drawn one pixel column at a time rather than with a CSS gradient, because the browser dithers its own gradients on some platforms — which would hide exactly the artefact this test is looking for.
How to read a banding test
Look along the ramp for edges. A good panel shows a continuous change with no visible steps; a poor one shows distinct strips, most obviously in the darker third where the eye is most sensitive to small differences.
The "force banding" control quantises the ramp deliberately, which gives you a known-bad reference to compare against. If your smooth gradient looks like the eight-step version, the problem is real rather than imagined.
Try each channel. Banding is often worse in one colour than the others, which usually points at the panel rather than the signal.
What this test cannot tell you
A browser cannot read your panel’s bit depth. What you see also depends on your graphics driver, the colour profile in use, and whether anything in the chain is dithering — so this shows you the result, not the cause.