There is a separate signal path for the line out, which starts at with a separate output from the chip. There are no caps internal to the Fuze, which allows you to tap the signal without degradation by SMD caps. The reason for the caps is to create a high-pass filter that will remove the DC offset produced by the line out amp.
The HPO path uses either phantom ground or caps in the output path, and the amp has been optimized for headphone loads. You can search this site for opinions on how the sound improves from the line out. Posts are peppered throughout, and there is an audition the Fuze thread with opinions from people that have heard a custom Fuze LOD (and one other person that has not).
