Price impact is the change caused by the trade itself. Slippage is the difference between the expected result and the final execution as the market changes.
What the swap settings do
A slippage limit sets the worst result a user is willing to accept before the transaction reverts. It does not remove price impact, network fees, or the risk of trading an incorrect token.
Large trades in shallow pools generally create more price impact than small trades in deep pools.
Price impact and market movement are different
Price impact comes from the trade changing pool balances. Slippage can also occur when the market moves between quote and execution.
Slippage tolerance is a protection boundary
A tighter limit can cause a transaction to revert; a wider limit permits a worse execution. It does not guarantee the quoted price.
Sources
Educational information, not investment advice.