After much searching in vain I finally came across this nugget of an explanation:
PivotCache::OptimizeCache Optimize storage for fields with less than or equal to 255 items
It is buried in the innards of a file explaining changes introduced in Excel 97. Here's the link to the file if you want to see it for yourself: Excel 97 Product Enhancements Guide
I presume this means that a different internal indexing mechanism is used in the cache if a byte is big enough to reference all the unique data occurences in a field.
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