The "greater than/less than +/-40mV" threshold is basically the minimum requirement to have the device even consider a transition. The Fail-Safe Operation (RO goes to a known output of HIGH) activates when there is no transition for 10us so if there isn't a 40mV transition then it doesn't count the edge. Similarly, the output state isn't "known" (it just stays the same) if you don't go past the 200mV hysteresis threshold.