Undernet uses a flood penalty system.
For each item sent to the server, it has a specific penalty value. So you accumulate penalty points, for lines sent to the server.
The server tracks how many points you have, and will take action, if you go above a certain value (Action unknown, I don't use undernet).
After one unit of time, one penalty point is removed (I am guessing the time unit is one second, though I don't know).
Eggdrop will also track average penalty points (we don't have access to this server information, so we keep as good a guess as possable, though I suspect it's pretty acurate, as the math may have come directly fromt he IRCD source code).
This creates a double protection system. Eggdrops normal anti-flood system, and a penalty points system, will reduce the amount of data sent tot he server, thus hoping to avoid action.
While this is designed for undernet, it may be usful in aiding the prevention on other networks.
The setting simply turns it on or off. It's off by default for all network, with the exception of undernet (which is on by default). The network is detmined from your net-type setting, though there is nothing to prevent you turning it on forcfully with this setting.
The fastdeq setting, is designed to reduce the amount of lines sent to the server, by stacking modes, kicks and other stackable commands support on a network.
An example of stackin: If you send the following lines to a server
MODE #chan +v user1
MODE #chan +v user2
MODE #chan +v user3
MODE #chan +v user4
MODE #chan +v user5
MODE #chan +v user6
MODE #chan +v user7
With stacking, will translate to
MODE #chan +vvvv user1 user2 user3 user4
MODE #chan +vvv user5 user6 user7
Reducing the lines sent to the server by 5.
What commands can be stacked, are dependant on the net-type you have set, so again, make sure this is st correctly.
Neither of these commands, will gurantee your bot doesn't flood off. They are sugestions, that could prevent it though.