Understatement and overstatement, as those names implied, is to minimize / to exaggerate the emphasis of the point on purpose to bring out the contradiction. This contradiction effect creates an indirect highlight for the emphasis as the receiver is processing the message.
Keep in mind that these statements, sometimes, through speaking, requires vocal tone and body language to imply the exact message. Without the vocal tone, these message can be confusing for comprehension.
Understatement is a style to minimize the emphasis on purpose.
Yeah, I'm, like, vaguely unhappy.
Overstatement is a style to exaggerate the emphasis on purpose.
I got a D in the exam; I'm as dead as a skeleton. I'm so dead that my granny is going to kill me.
I got a D in exam and I will face a dreadful consequences later.
"Yeah. I'm pretty upset about that," Mary said happily.
Applying understatement or overstatement for a formal clauses reflects the sender (writer/speaker) integrity and character. Bad (not wrong) frequent use of these styles can create distrust in you.