The modulator pin accepts a low frequency (base band) signal that modulates the output of e.g. a generator, typically in amplitude, frequency or phase. Its use is that this is the signal you are actually interested in. The high frequency signal is just a carrier: without modulation it is useless.
For example, when you want to test a receiver, you set the RF frequency to the receiver input frequency. You then apply a test signal to the modulator input of the generator and if all is well, this test signal should also come out of the receiver you are testing.
It is also possible that you only need the unmodulated carrier, e.g. if you use this as an input to a mixer, to test the linearity of an amplifier, for synchronisation, artificial interference, etc.
Adding to Gert explanations, a modulator is circuit that has two inputs and one output, the inputs are the high frequency carrier signal, the low frequency information signal, and the the output is the modulated carrier wave. The low frequency signal is for sake of measurements and or for as information for radio frequency transmission The high frequency signal may be in the microwave range. The type of modulation here is mostly amplitude modulation, where the amplitude of the carrier is made to change according to amplitude of the low frequency modulating signal which acts as a bias source to the diode. The diode acts merely a bias dependent resistance.For more information about microwave pin modulator and its many applications please see the interesting paper titeled THE PIN DIODE AS A MICROWAVE MODULATOR in the LINK: http://www.hpmemoryproject.org/an/pdf/an_58.pdf
The PIN diode passes RF signal and may act as switch/modulator if it's I electrode is biased with a voltage usually TTL level, and in this condition the RF output is attenuated say upto 20db.