It looks like both 'raw' and 'wait' are dynamic parameters. And, 'wait' is using FileSystemWatcher in the background. The default time it waits for changes, seems to be 500ms.
Once, it timesout; the thread sleeps for an additional 100ms and then seeks beginning of the stream and discards buffers.
Reference: Figured it out after reading through PowerShell MVP Oisin Grehan's blog 'A trick to jump directly to a Cmdlet’s implementation in Reflector', 'Reflect-Cmdlet'.
Also, read the following question: can we see the source code for PowerShell cmdlets