In particular, If you have turned on the Mutual Friends option, only 500 of those friends will be checked for Mutual status. kind of implies that if you /haven't/ turned on the option, there isn't the same restriction. I would suggest rewording it to make a distinction between mutual friend status -- which affects placement in the mutual friends list if that option is selected, and otherwise affects bolding -- and the Mutual Friends list itself. Only I can't think of good wording, so I'll let other people deal with that \o/
(While we're tweaking this FAQ, it is mildly annoying that the description of the mutual friends option has the "wrong" parallel, in that it's not so much "everyone you friend that friends you too" as "everyone that's friended you that you've also friended". It's a division of the friend-of list, not of the friends list; the MF option doesn't separate stuff into one-way-friends, mutual friends, and one-way-friend-ofs, but only separates the friend-ofs into mutual and non-mutual. Granted, it comes out the same in the end, but it would make me feel better to have the MF and AFO sections be parallel. </nitpicky>)