There are different buffers for android logging, radio/events/main/system/crash, and the applications can write to these buffers, which are read by logcat.
Refer this link! for the explanation of the buffers.
These are basically circular buffers of defined sizes, and the previous buffer is overwritten, if not read.
Logger Buffer Sizes option allows you to change the buffer size of these mentioned buffers.
Increasing the buffer size would allow you to capture more logs in the buffer, and reducing the probability of an overwrite in case of high-frequency logs.
Setting the option to "OFF" would disable logging.
These only impact logcat. It is not related to dmesg. "dmesg" prints the message buffer of kernel.