I saw another thread somewhere which confirms this: once the room temperature falls below target by 0.5 degrees, it applies 1/4 of the modulation value (2.5 for you). Then if it falls by another 0.5 degrees, it applies another 1/4.
I use modulation of 4, so 1 degree change to LWT for each 0.5 degree error. For the most part, this then gives just enough negative feedback to keep the room at 0.5 degrees below the target temperature (19.5 degrees with a target of 20 - when it drops below, LWT gets increased, and when it reaches 19.5, LWT reduces again).