The threshold knob sets the level at which a passage is considered "loud" — that’s the point at which the compressor will start working. For example, if you set the threshold to -16 dB, then everything below that level will pass straight through, while anything above -16 dB will be attenuated according to the ratio setting.
I have a sound setup with a treshold at -10dB, and while the dB bar barely hit -20dB when I play even 2 notes at the same time, the compressor still is boosting the sound louder.
Why does that happen?