For easy description let's say the window size is 500x500 and you run in a browser window sized to 1000x1000. Low quality mode is simple enough: it renders at 500x500 then stretches the final result up to 1000x1000. If you add a sprite with a 128x128 image and scale it down to 64x64 in the layout, it will have lost detail, since it rendered at 64x64 to the unscaled canvas (at 500x500), which loses some of the image quality, then just stretches the result up.
High quality mode (i.e. what it's always done before r153) renders directly at the larger size (1000x1000). Since the view is now twice as big, if you draw the downscaled 64x64 sprite, it actually appears on the screen twice as big (at 128x128 again). Since it's rendering directly using the full resolution available, this means all the pixels of the original 128x128 sprite image appear with full detail. In other words, if you scale objects down in the layout then scale the view back up with a fullscreen mode, you get the detail back. In low-quality mode you lose the detail. Some types of games use a lot of downscaled sprites, so this can make a big difference to the visual appearance.