A "blit" is just jargon for drawing a sprite or image. See
http://en.wikipedia.org/wiki/Bit_blit. Just keep in mind even their process there isn't entirely accurate for what we do for software drawing, but it could give you a rough idea of how it works.
To be honest, Draw would be a lot more straightforward, but it's the weird terminology we've lived with.
At any rate, if you draw an image onto itself, you will definitely see weird effects, and this is because the source and destination are the same. So as it starts drawing to the destination image, the source image gets affected because they're the same image. The drawing algorithms generally only look at a few pixels at a time to save memory and time in software. So unless you draw an exact copy of the image with no translation/scaling/flipping/rotating, you're bound to see those sorts of effects.
But yeah, I've done drawing an image onto itself a few times, sometimes by accident. It's pretty weird!
Flipping or rotating-by-multiples-of-90s are I think some of the few effects you COULD do without needing to draw or create a secondary image, by doing it in-place. But Verge doesn't ever bother checking if the special case if src == dest since it's easy enough to just blit onto another image.