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They're basically a kludge to work around the problems x264 has with dark scenes. All it does is increase the bitrate allocated to flat blocks, ie blocks with little detail. Since these blocks are often where x264 falls over, it's a reasonably effective to fix.
Not it's not part of normal x264, it's a custom patch that sharktooth compiles into his builds.
Read the --longhelp for a little more info.
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