Executable permission (x) in directory is needed to allow other users/groups (such as webservers) to list the content... However if you are sure you use just one user or just an user and a group you could change to 0700 or 0750...
Theoretically the webserver user/group should be able to access in write mode only fp-content... All other directories user/group should be yours and you should set chmod like 0755 for dirs and 0644 for files. Fp-content should be yours too but have permissions 0777 to allow webserver to write in.
So the answer is: these constants applies to all files and directories in fp-content, not just fp-content/content but neither to the root of your FP installation.
The restore chmod feature applies to fp-content only, too.
Constants however apply on all Flatpress I/O functions (so io_write_file, fs_makedir...) when FP can access these files/directories as owner, because otherwise it couldn't change permissions.
So if you change a file outside fp-content and FP is the owner, it will have the permission you set on FILE_PERMISSIONS, otherwise its chmod won't be modified.
However the theoretical scenario isn't widespread: when you publish your files in your webspace usually you just use one user/group.
This permission division is more common when you have a SSH access or if you are developing the site in a Linux/Unix box...