I finally figured out how "STEM FX" work, and it's not good.

AlphaTheta rep, and anyone else perplexed about this feature, I have the answer you have been looking for. The "STEM FX" isn't like what you find on Serato or Virtual DJ. In fact, it is nothing like those. Those four additional pads allow you to isolate which stem you don't want effects applied to. Yes, you read that correctly. Unlike Serato or Virtual DJ, where you can press a pad and the vocals echo out nice and neat for the user to be able to drop a new vocal on the existing tune that they are running. This implementation is poor. No wonder why they never put out a promo video explaining how it works. I thought something was wrong with Rekordbox as I thought it worked like Serato DJ Pro or Virtual DJ's STEM+FX feature. I hope this helps everyone who reads this. It took me almost two months to finally figure this out. This is extremely goofy and not user-friendly.