batchSize: The number of files or folders to be picked up per scan. Use to prevent an overload on the system; scanning too many files at one time can cause a crash. The default value is 2.
The Poll Interval and Batch Size settings determine how many files Watched Folder picks up in every scan. Watched Folder uses a Quartz thread pool to scan the input folder. The thread pool is shared with other services. If the scan interval is small, the threads scan the input folder often. If files are dropped frequently into the Watched Folder, then you should keep the scan interval small. If files are dropped infrequently, use a larger scan interval so that the other services can use the threads.
Stage Folder: The input folder is scanned for files or folders that match the include file pattern and excludes files or folders for the specified exclude file pattern. In one scan, the number of files or folders that are processed are based on the batch size. If the files or folders are not completely downloaded, they are picked up in the next scan. The files or folders are moved to the stage folder after selecting them for processing. After files are moved to the stage folder, invocation requests are created for each file and the target service is invoked.
You can read more about the properties here:
AEM 6.1 Forms Help | Watched folder in AEM forms
LiveCycle ES4 * Failure points and recovery
LiveCycle ES4 * How Watched Folder works
