Psychovisual
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"Traditionally, the encoder tends to favor blurred reconstructed blocks over blocks which have wrong motion. The human eye generally prefers the wrong motion over the blur. Psycho-visual options combat this. While technically less “correct”, which is why they are disabled for research purposes, they should be enabled for content intended for “human eyes”. "
-- Kokomins' x265 guide
Breakdown
Traditionally, encoders prioritize blurring out fine details to maintain performance on simple metrics like PSNR, but the human visual system is much more complex. This discrepancy can lead to encoders rejecting sharp blocks that don't fit perfectly with adjacent blocks, resulting in a loss of detail. Psychovisual options address this issue by providing the encoder with the necessary "confidence" to incorporate these sharper blocks, even if they don't strictly adhere to metric performance.
Blurring can be beneficial at lower bitrates to help reduce the visibility of blocking artifacts, and it is generally preferable to view a slightly blurry image rather than a blocky one with distracting artifacts. However, it is essential to strike a balance when setting psychovisual options, as over-reliance on these settings can also have negative consequences. Experimentation is key to finding the optimal sweet spot for specific types of content.