This command is accessible via main menu > Transform in selection / transformation mode or via pop-up menu in node editing mode.
Reduce Nodes Number removes nodes from selected objects according to chosen "Simplicity" parameter. This function is intended mainly to smooth lettering with distorted edges and large number of nodes, which is hard to edit node-by-node.
Left: high number of nodes on the edge. Right: nodes after reduction of their number while preserving the edge shape.