You knit that stitch then slide it off. The pulling the yarn between stitches, you pull that up with the right needle, then place on the left, knit as if it were a normal stitch, then keep going. This makes a right increase.
The same increase leaning left would be if you were to skip that yarn between stitches and pull up the one in the row below it. This is, of course, pulled up from the wrong side of the work.