'L' will reduce dynamic range. It effectively exposes at 100 and clips.
With my 1Ds Mark II
I can maximize DR by setting the ISO (= gain) to ISO 'L', which effectively is approx. ISO 75-80 although the exposure meter assumes ISO 50 (which would overexpose the image). The Raw read noise level is lower (by 10-12%) than at ISO 100, and the saturation level is the same, thus maximum DR (engineering definition) and native sensitivity is ~ISO 80.
On my 1Ds Mark III however, ISO 'L' and ISO 100 both result in virtually identical read noise and saturation levels, so the best DR is at the native sensitivity of ISO 100:
The 1Ds2 has a 12-bit ADC, the 1Ds3 has a 14-bit ADC, so I normalized the Raw ADUs to 16-bits in the above graphs, for easier comparison.