what does PSM off button do in porsche cars?

PSM =Porsche Stability Management. If you turn PSM off, your Cayenne will be more subceptible to slides/erratic behavior in hard driving or emergency situations. Probably best to leave it on unless you're taking it to a track day or playing in a rainy/snowy parking lot.

"and, with Porsche Stability Management (PSM) on, will follow your lead on a twisty road."