When you decline rewards, the rewards remain in the pool, so it goes towards raising everyone else's reward a little.

I generally don't set my posts to this setting except when I am pretty sure they will get a lot of votes and the issue in question is about benefiting the community. I also don't like 50/50, but since I have to work a lot harder to get upvotes with a new account, I won't be posting declined payout posts for a while, unless it seems really necessary to support my position.