"The arc on a surface gap goes
"The arc on a surface gap goes from the electrode to the closest surface that is grounded when the plug fires (in the case of these, the metal shell of the plug itself - so the closest metal on the bottom of the plug separated from the electrode by the little insulation ring surrounding the electrode - so just arcs back to the base of the threaded part).
The "intended" benefit of surface gap plugs is that they don't have a heat range, never overheat (because none of the plug is extending into the cylinder so they run at the same temperature as the cylinder wall or head itself) which in turn will never cause pre-ignition. A definate plus when running higher speeds and the motor is generating alot of heat that needs to be disappated.
So the gap is (set) by the actual design of the plug itself instead of you having to gap a plug that could otherwise be used on multiple applications at different gaps.
On the downside, a surface gap requires a higher power ignition than a gapped plug to fire properly.
That is why, in general, a gapped plug is recommended for "sustained" lower speed operations, where regardless of whether or not your particular ignition has high and low speed windings (common on Merc's - with only the low speed producing power below about 2500 rpms) or common windings that produce less power at lower rpms, since the ignition my not produce optimum power to correctly fire a surface gap plug.
For myself, on my motors, if I have a cross reference to a "gapped" plug I will run that instead of a surface gap simply because that better suits my style of boating (lower speed the majority of the time), however not every motor has an "optional" plug - could be because the engineers never considered it or because there may be clearance issues that prevent safely running a gapped plug..."