With reaction of 2000, it will take bot up to 2 seconds to notice that a new npc, object, etc has been spawned/died/etc.
Fps setting affects other data refresh rate (such as opened interfaces, npc hp, etc).
So with 50 fps, it will take bot up to 20 ms to notice that a new interface has been opened, npc hp has changed, etc.
With 20 fps, it becomes 50 ms; With 10 fps - 100 ms and so on...
The benefit of having slower refresh rates (as long as script still works fine) is the greatly reduced cpu usage.
Most of the basic scripts (like woodcutting ones) will work perfectly fine with 5 fps, reducing cpu usage by almost a half in some cases.