In order to paginate, it must have both > 25 top-level comments and >=50 total comments. If there < 25 top-level comments, but less than 50 comments on the entry, it won't paginate. Won't collapse, either, but that's already covered. If there are >=50 comments but <=25 top-level comments, the comments will just collapse, no pagination.
So basically, when there are more than 25 top-level comments and at least 50 comments on an entry, the comment threads will be split up into pages, with 25 top-level comments per page. Can't think of a good way to phrase this; every way I try just seems to confuse the issue more.