Why does the discharge ceiling jump to 800 amps at this size?

Plate area. The 12280W carries enough of it to sustain 800 amps where the 12200W is held to 400, and CSB keeps the 800 amp ceiling through the 12330W and 12390W above it. If your inverter draws a step above 400 amps, this is the smallest block in the range that takes it on a single string.

Is the short circuit current really higher than on the HRL12330W?

Yes. CSB publishes 2,576 amps for the 12280W and 2,386 amps for the larger 12330W. Short circuit current tracks internal resistance and cell geometry rather than capacity, so it moves independently of the amp hour figure. Coordinate protection from each block's own published number and leave interpolation across the range out of it.

Can the HRL12280W be used in a cycling application?

It can be discharged, though that falls outside what the block is designed around. CSB builds the HRL range for high rate standby and float service, and the ten year design life assumes the string sits charged and is called on rarely. Regular deep cycling will take years off it. If your application cycles daily, tell us and we will point you at a deep cycle series instead, even though it is a different sale.

What does a 3.50 milliohm reading mean on a battery that has been in service?

Treat it as the reference point rather than a pass mark. CSB publishes 3.50 milliohms approximate for a new block. Impedance climbs as a battery ages, and most maintenance programs flag a unit once it drifts a set percentage above its commissioning reading. That is why the commissioning number matters more than the datasheet one: take it when the string goes in and compare against it thereafter.