Vinegar is supposedly an odor absorber. My mother use to add vinegar to just dyed fabric to lock in the color.

I put vinegar in the fabric softener cup of my top loader. I think it prevents mildew from growing in the machine. (plus I leave the door of the washer ajar).

I have used vinegar in rinse dispenser of top loading 35 year old Maytag washer for many, many years. Vinegar helps to rinse detergent from clothes leaving them soft and keeps the gunk from collecting in the washing machine. The agitator area always stays clean with no build up of detergent. Vinegar does not prevent static in the dryer, I still use dryer sheets for synthetic fabrics.

When I lived in an area with hard water, I used vinegar in the rinse, a couple of ounces. My line dried clothes were softer, less stiff. No difference with clothes that went through the dryer.

Vinegar is mildly acidic and functions as a laundry "sour" which counteracts the alkalinity of detergent to regain a neutral pH.
Understanding Laundry Chemicals

Also in hard water areas it helps remove residual salts left in the clothes from the hard water.

In the summer I use vinegar on my husband's sweaty work clothes to help freshen them. Now, with the new steam dryer, he's "into" steamed white t-shirts (what he wears to work).

Does anyone know if it causes fading in any way?

I did not notice any fading.

I have used vinegar or citric acid for many years and never noticed any fading.

^^ Good to know - thanks!

I've also used vinegar in my rinse dispenser for years. I buy the box of two at Costco, super cheap.

Is it the same vinegar I use to descale my Keurig coffee maker? White distilled?