OK. Consider the following scenario.
A Cell has got high Paging Discards with MFRMS settings equal to 6.
Now this means that paging queue is not enough as pages are being discarded. Also as MFRMS is high, each group comes after a longer time hence each PAGE is needed to be kept in the queue for a longer duration.
By reducing MFRMS to 2 or 3, we did two important things. Firstly, we increased the Queue Size, secondly we reduced the average time for each Page in the queue. This is the actual thing which reduced the Paging Discards from our cell.