Last time I checked
Stop a Repeat, For or For each loop currently running. These loops are system conditions. The rest of the event's actions and subevents will still complete, but the loop will not run any further after that."
So I would guess it stops, well, the current loop it is in.
So if you have
Repeat 10 times, for i from 0 to 10, stop loop
It would stop the for loop