Malic acid loosens the bonds between dead cells on the surface of the skin, so they shed more readily instead of sitting there looking dull and rough. That is what every alpha hydroxy acid does. The result is smoother texture and, over time, a modest evening of tone as pigmented surface cells turn over faster.
Two things make malic acid weaker than its better-known relatives. It is a larger molecule than glycolic acid, so less of it gets through the surface at the same concentration. And it has two acid groups rather than one, which changes how it behaves in a formula and means more of it is needed to reach a given pH.
That second property is why malic acid is often in a product for reasons that have nothing to do with exfoliation. Formulators use it to adjust and buffer pH. A label listing malic acid may simply be telling you the chemist needed to bring the pH down - not that you are getting a meaningful exfoliating dose.
Malic acid is not a brightener in the pigment-blocking sense. It does not slow tyrosinase the way arbutin, kojic acid or hydroquinone do. Any effect it has on discoloration comes from shedding pigmented surface cells faster, which is a real but limited mechanism.
The side effects of malic acid are the side effects of AHAs generally, and generally on the milder end because the doses are small.
Do not use malic acid, or any AHA, on skin that is broken, sunburned, freshly shaved or waxed, or currently peeling.
Skip it during an active flare of eczema, perioral dermatitis or inflamed rosacea. Exfoliating inflamed skin makes it worse.
If you already use a prescription retinoid, an in-office peel schedule or another daily acid, adding malic acid on top gains you nothing and costs you barrier.
If you are prone to post-inflammatory hyperpigmentation, be conservative. On brown and Black skin, the mark left by over-exfoliation frequently outlasts the mark you were trying to treat. Mandelic acid or lactic acid at a low strength is a gentler way to get the same effect.
Pregnancy and breastfeeding: topical AHAs including malic acid are considered fine. Very little is absorbed, and there is no reason to stop.
Nobody has a medical reason to seek malic acid out. If you have found a blend that suits your skin and it happens to contain malic acid, that is a fine reason to keep using it.