If you enable CTS flow control (by setting D7 to 1), when the serial receive buffer is 7 bytes away from being full, the device de-asserts CTS(sets it high) to signal to the host device to stop sending serial data. The device reasserts CTS after the serial receive buffer has 14 bytes of space. The maximum space available for receiving serial data is 109 bytes, which is enough to hold 1.5 full packets of data.
Use the FT parameter to set the flow control threshold. Since the receive serial buffer is 109 bytes, you cannot set FT to more than 109-7 = 102 bytes. This allows up to 7 bytes of data to come in after CTS is de-asserted before data is dropped. The default value of FT is 81, leaving space for an external device that responds slowly to CTS being de-asserted. The minimum value of FT is 7, which is the minimal operational level.