Here is how it works from what i can see.
With gsync active, and vsync on:
The fps wont go above your refresh rate, and you will have no tearing as you know.
With gsync active and vsync off:
The fps is allowed to go above your refresh rate. Any time the fps is above your refresh rate, gsync is temporarily inactive, but since there's no vsync there is tearing. Any time the fps falls back under your refresh rate, gsync is once again active and tearing will cease.
With gsync active and the new fastsync on:
The fps is allowed to go above your refresh rate. Any time the fps is above your refresh rate, gsync is temporarily inactive, but since there's fastsync there is no tearing. Any time the fps falls back under your refresh rate, gsync is once again active, though since there is no tearing throughout it's harder to notice. Though not impossible - fastsync does seem to lack the buttery smoothness of gsync, and this is more apparent the lower the refresh rate is.
I have found that at 165hz, the periods of gameplay where fastsync is active (fps above 165) are noticeably smoother than the same scenario at 60hz and above 60fps. This sort of makes sense, as in the example of csgo, each second around 300 frames need to be looked at, with 240 discarded and 60 sent to the monitor. Whereas at 165hz, 135 frames are discarded and 165 sent to the monitor. So the lower your refresh rate, the harder it is to send the exact frames that would result in the smoothest frame updates, as the smaller the number of frames to work with the better the algorithm has to be to achieve the smoothest experience. This is no doubt an oversimplification and I'm just going by educated guesses, but this seems to be what I'm seeing.