so what's the layman description of this? Don't sue us and we won't sue you? That seems like a pretty good way of applying MAD to the patent space

It goes a step beyond and says not to even think about challenging one of their patents. So if facebook patents something stupid, and you call bullshit, you can't use their software.

Even worse: if you just say "Software Patents are invalid", you lose the right to all their products. Or if you claim to have prior art to any of their products, you lose access to all other of their products as well.