An image can be transformed into a set of wavelet scales. There are detail scales and one residual. The detail scales contain the image details of a their scale size.
This means that scale 1 contains only image details of the smallest scale. Scale 2 details are larger and scale 3 details even larger, etc.
Wavelet Decompose computes these scales losslessly and creates a new layer for each one. The recomposition is the addition of all scales which is done by GIMP using the grain merge layer mode.
You can then paint the Wavelet Decompose scales with your favourite tool, using (128,128,128) as neutral colour (for the details, not the residual). Values below neutral darken, values above lighten.