It multiplies the BPM of the song, 1/12 will multiply it by 3 I think, then 1/16 by 4, planning on putting objects on each/every other 1/12 or 1/16 beat, even on something like 90 BPM, would be fast. Maybe too fast.
Would recommend using these for slider shapes for higher slider velocities.
Using these for technical maps is ideal too.
This doesn't decrease the chance of it getting ranked, it is up to mapper how it is mapped. If it fits the beat division, then use it. Don't let the game set your limits (except for the ranking criteria, everyone wants a ranked map.).