Honor is basically your wins and lose rate (in terms of games). If you have more wins than loses by a small amount, then your overall honor is going to be average. However, if you have more wins than loses by a large amount then your honor is going to be Good. If you have more loses then wins by a large amount then your honor is going to be Bad.
IF you keep quitting your games, expecially in S&D mode, you will keep losing some honor. And if you keep playing until the end, you will see that it will recover over time. You can test it by yourself.
ITs not just a decoration. (Why the heck would anyone do that? Poinless coding? LOL). You can easily pick rage quitters, or those who have weirdly high or low win/lose or K/D ratio to their rank but have bad honor, its (mostly) because they are one of those salty players who rage quit after few rounds of lost. Also many kids with ADHD (who rushes from game to game). Its a great way to avoid toxic and kiddo players.
But you can also lose honor if you get disconnected often.