This has been around on the internet for years. It hasn't been explained properly as far as I've seen, and is not entirely superior to editing the Post FX variables individually manually. With Post FX set to false, depth of field over distant mountains in the scenery is disabled (something which cannot be achieved with any in-game Post FX setting) and FXAA is enabled (while it is disabled with Post FX set to low), that is demonstrated in this Steam guide:
https://steamcommunity.com/sharedfiles/filedetails/?id=273288124
However, Post FX set to false keeps some settings enabled or disabled in ways that are visually inferior to Post FX set to high or above. This is the full set of variables for the Post FX setting:
GameDepthOfField, DepthDownsample, CinematicDepthOfField, FXAALevel, CloudShadows, MotionBlur
With Post FX set to false, low, or medium, you get DepthDownsample="1" which seems to lower the resolution of certain shading effects and can make nearby objects blurry, especially around their edges. I believe false, low and medium also don't have cloud shadows enabled. These options do have motion blur disabled though, which might be a plus to some people. All things considered, using low, medium, or setting it to false is not ideal.
I have added intructions on how to customize the Post FX setting and disable certain effects while keeping others, that way users can do the best combination possible. For example, leaving DepthDownsample="0" and CloudShadows="1" by simply not editing or even adding these variables at all, but disabling DOF, FXAA and motion blur if desired by setting them to "0".
https://www.pcgamingwiki.com/wiki/Far_Cry_3#Disabling_post-processing_effects_separately