Internally, the stylesheet refers to font sizes in purely relative terms. This is done by defining a scaled set of fonts (sizes 1, 2, 3, etc.) based at the default text font size (e.g. 10pt). The %hsize-bump-factor% describes the ratio between scaled sizes. The default is 1.2.
Each hsize is %hsize-bump-factor% times larger than the previous hsize. For example, if the base size is 10pt, and %hsize-bump-factor% 1.2, hsize 1 is 12pt, hsize 2 is 14.4pt, hsize 3 is 17.28pt, etc.