On Pentax DSLRs, these are mainly processing/exposure behaviors rather than the sensor magically gaining extra native dynamic range.

• shadow correction: This is image processing that lifts darker tones, so it affects JPEG output. It generally has no real effect on RAW capture.
• highlight correction: This works differently. It effectively protects highlights by underexposing about 1 stop, then storing a flag/setting for compatible software to interpret. In RAW, the result is essentially an image that looks 1 stop darker, preserving more highlight headroom.

So for RAW shooters, highlight correction does not truly increase the sensor’s intrinsic dynamic range; it mainly changes exposure strategy to avoid clipping highlights. That’s also why enabling it can remove the lowest ISO setting.

Downsides of highlight correction: your RAW files may look underexposed unless corrected in post, and raising exposure later can also raise shadow noise. If you shoot JPEG, the camera can apply its intended tone adjustment automatically. If you shoot RAW, you can usually achieve a similar result yourself by exposing more conservatively and adjusting in post.