Fade Up (fade in) & Fade Down (fade out) are only useful during recording, and serve to gradually ramp the recording levels up or down for you. For example, let's say you want to record songs from the radio and you want to avoid the DJ talking or commercials.... You wait with the deck in rec-pause mode and fade-down already pressed. Then as the talking starts to end you hit play to make the recording start and then hit FADE UP and the deck will gradually increase the recording levels to what you have set on the actual recording levels. As the song ends (or you reach the end of the tape) and you want to avoid abrupt stops.... you can hit FADE DOWN and the recording will go to gradual (rather than abrupt) silence. With most Naks that have this feature, there are two fade speeds, depending on how long you press the button. (Download & read the owners manual).
The timer start/stop/rec button will dictate the deck's behavior when it is powered on. You can test this by switching the deck off and moving the selector to "PLAY." When you turn the deck on again, it will start to play the tape. And if you select "RECORD" the deck will start to record when it is turned on. This is useful if your system is powered on/off by a programmable audio timer. It basically turns your system into an alarm clock, or you can set it up to record radio shows when you're not at home or asleep.
BEWARE: Inadvertently having that switch set to "RECORD" can cause accidental tape erasing!