Explanation - If Cloak is enabled:
When Torque checks whether the enemy can be fragged, it is necessary for his cloaking to be turned off. The reason for this is probably that cloaking uses ammo at a fast rate, and is not strictly necessary at this time.

If the cloak is enabled, then the fragchk routine which Torque jumps to will simply turn the cloak off, and then continue through to the routine which would have been used if the cloak had been turned off in the first place.