When you open up on Full-Auto (the Spin-Up skill), and just keep firing (hold shift + skill button to force-aim at anything)... as your rate of fire goes up, you'll see clearly that your shots aren't all going exactly to the same spot. instead they're making a kind of "cone" of fire. shots will randomly travel along any line within that cone... high or low, left or right.

I'm told for the Heavy Bolter, the cone is about 12 degrees...

"Spread -1" reduces that by 1 degree, so your cone of fire is now 11 degrees, meaning your spray of fire is slightly more on target.

different weapons will have different sized cones of fire, but spread reduction will work the same on all of them, making any auto-fire weapon a bit more accurate.

Spread refers to how narrow (or close to the target) an automatic weapon's bullets will be.

If you check any of the high rate of fire guns/lasers the skills that do not fire a single shot per press will have a spread (in degrees). If I had to guess it reduces the spread by 1 degree (so 4° becomes 3°, etc)