CPU load in games - what is the GPU/DirectX doing to make CPU load higher? More of a question about what's possible in DX.

Some people have reported that when running games on higher settings they get less CPU load but when dropping the settings the CPU load increases.

What would be causing increased CPU load in these cases? 

Someone suggested that the DirectX API falls back to software when certain features are turned off, but is this something that can happen - can DirectX do a mixed render where some stuff in the render pipeline is pushed through the CPU and the rest goes to the GPU?

My thoughts were texture quality and downsampling and potentially physics processing not being offloaded but does anyone actually know what the cause might be?
The most likely explanation is that the game is GPU-bounded and not running at a fixed frame rate. If reducing the quality in the settings allows the game to reach a higher frame rate, the GPU load will be the same, but the CPU load will increase: the CPU is doing the same amount of work per frame (or possibly less), but there are more frames per second, so the total amount of CPU work per second increases. If the game does some non-graphics work per frame as well (for example, if physics updates are at the same rate, or if input is polled once per frame), the effect will be even greater.

Forcing rendering to a fixed frame-rate would allow a controlled comparison.

Your hypothesis about software emulation of features may apply to some features in some games. A particular hardware feature might be exposed as an option because it's slow on some GPUs, and turning the feature off uses a CPU implementation in the game instead. If you have more specific questions about that, be sure to ask a new question which includes the source code you're working on and the benchmark results.