It should be able to handle the dynamic peaks better, i.e. explosions during action movies.
In most cases, when a speaker is set to "large" the receiver thinks it can play low frequencies and will send a full range signal to the speaker and nothing to the sub. If the speaker is only rated down to 50hz, you're going to be missing a lot, and/or the impact of some scenes will be lessened. The sub will play 25Hz with a lot more authority than the M60s. The M60s will struggle to reach that. When you set the speakers to small and the crossover at 80Hz, you are telling the receiver the speaker will play everything above that point and the sub will handle everything below. There is some overlap at the crossover points to help with smooth transitions.
