I think the payout dust threshold is slightly higher than 1.2, but basically yes—if something doesn't get over the threshold, and then maintain it (because amounts adjust over the seven day period) then it's gone, reabsorbed, whatever happens to it. That part, I'm not so clear on, just where it all goes. It would seem to me that once it's created and allocated that it couldn't just disappear, which means it goes somewhere. I don't know. I've been hoping someone might answer that.

I'm not sure what it's supposed to do against the larger accounts. It's supposedly keeps the computation load on the blockchain down. That's what I got out of it.

As long as the accumulative amount on the comment or post exceeds the payout threshold (0.019 or whatever) then no, it wouldn't be absorbed. So ten people each voting $0.01 would make $0.10 and get paid accordingly.