In palette-limited environments (8-bit consoles, GIF palettes) a smooth gradient is faked by alternating two colours in a grid pattern that the eye blends into an intermediate tone. A regular grid is "Bayer dithering"; using noise instead is "noise dithering."
On the web it's approximated by generating noise with an SVG feTurbulence filter and compositing it (feComposite) over the source to look like a dot pattern. It's seen a comeback lately as a deliberate retro texture on 3D/agency sites.
When to use
Use for retro-game moods, hiding banding in a WebGL gradient, or texture on a brutalist site. It’s too much for an ordinary UI background.