The switch sets the sample rate of the ADC in the device to 12 or 20 MSPS, then configures the timing and the DSP filrers of the decoder accordingly. The MLAT frequency is based on the ADC sample rate. When the output is AVRAS, the counter is appended to the frame as-is. When using Beast format, if the MLAT is 20 MHz (20 MSPS at the ADC), it is converted to 12 MHz by a simple multiplication by 12 / 20.
The “oversampling” factor when using -m 12 is x6, and when using -m 20 it is x10 compared to the baseline of 2 MHz required to decode the mode-s frames at 1 Mbps in PPM.
More oversampling is better because 20 MSPS gives a better timing resolution and can detect weaker signals at the edge of the noise floor. It is useful when detecting overlapping signal peaks that will just show up as “valleys” with a lower timing resolution.