An explanation by @yaser was posted on the 2014 edX forum:
Quote:
Q. Why is the bottom part of this figure behaving differently?
A. This is an artifact and it has to do with our choice of the models (2nd and 10th order polynomials). For Qf≤10 there is no deterministic noise for H10 (we can perfectly fit them).
Q. Why did we add stochastic noise to the target when generating the above figure; aren’t we just analyzing deterministic noise?
A. We wanted to compare the two figures fairly. When plotting the impact of the stochastic noise, we already had some builtin deterministic noise in our target function as well.

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