I took a look at the code in includes/classes/shipping.php and here's what it looks like to me (if you can find any reasonable logic in it, you're mind is more twisted than mine):
The total order weight is compared to the setting for defined maximum box weight that you will ship (set in Admin > Configuration > Shipping). If it is greater than or equal to the defined maximum box weight, the cart adds the tare for large boxes. If it is smaller than the defined maximum weight, the tare for small/medium boxes is added.
Now comes the illogical bit - after adding the tare as above, the new total weight is again compared to the defined maximum box weight: if it exceeds that maximum, it is split into a number of boxes (each equal to the defined maximum box weight) plus an extra box for whatever is left over.
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