Oh, yea this is a bit weird... but they're different options for nosetests.   

Here the 'failed' option sets the '--failed' flag in the nose command, which reruns only tests that failed in the previous run.   

The 'fail_fast' option sets the '--stop' flag in the nose command, which stops the tests as soon as there is a failure.  Its using the 'fail_fast' name because that's what it was in rake.