Looking at the
MS article. The thresholds appear to be up to the hardware manufacturer. Windows just tells the motherboard which method to use. There are no hard and fast limits. It will vary by manufacturer and model.
If the threshold on your computer is 80C. Once it hits 80C it will decrease the CPU voltage and speed (and possibly other components) to maintain that temperature. It will keep doing so until it hits the minimum CPU limits they've defined or CPU load has decreased and temps start going back down. It will start speeding up the fans if those minimum CPU limits aren't enough to keep it at 80C.
Unless you are unduly concerned about noise. On a desktop you should use active for best performance. On a laptop set it to passive when on battery and active when plugged in. In order to save battery life.