Dismissing a Spell

[Tetsu Yama Takahashi]

What exactly does it mean to dismiss a spell? Some spells have lingering effects even if those affected are no longer in the original area of effect (such as Mind Fog or Loathesome Veil). So if I use a Fleeting Spell Mind Fog (which means it's now dismissible), does the penalty still remain even if I dismiss the spell, or do the effect linger on someone already affected by the Mind Fog?

[TxSam88]

in the case of Mind Fog, dismissing it would mean that the Fog is gone, but those affected by it are still affected.

[avr]

Yeah, as with instantaneous spells like color spray, the spell being gone doesn't mean that aftereffects of the spell are gone too. The penalty will remain on those that failed their save against the mind fog after the spell is dismissed and the fog goes away.

[Azothath]

spell descriptions on AoN wrote:

(D) Dismissible: If the duration line ends with “(D),” you can dismiss the spell at will. You must be within range of the spell’s effect and must speak words of dismissal, which are usually a modified form of the spell’s verbal component. If the spell has no verbal component, you can dismiss the effect with a gesture. Dismissing a spell is a standard action that does not provoke attacks of opportunity.

see Spell Descriptions

Note: it is a Standard Action, not a Free action.
Dismiss generally means to end a spell (effect) before the duration would naturally expire.
Usually it is for the entire spell effect but in a few cases (see individual spell descriptions) it is for individuals affected by the spell (aka failed their save). Potions define their imbibers/drinkers as the caster and thus responsible for dismissing the spell if desired.
Instantaneous means the spell effect is applied and then the magic fades, so there's nothing to dismiss or dispel afterwards.