Two out-of-tune flutes produce frequencies of 258 Hz and 266 Hz, resulting in beat frequencies of 3 Hz and 5 Hz when played with a tuning fork, leading to the conclusion that the fork's frequency is 261 Hz. The discussion highlights the importance of understanding beat frequencies, which are the absolute differences between two tones, and how they can yield multiple possible frequencies for a note played alongside a reference tone. A hypothetical scenario with a 440 Hz tuning fork and two notes, x and z, 10 Hz apart, reveals that both notes must be on the same side of the reference frequency due to their respective beat frequencies. The conversation emphasizes the necessity of correctly setting up equations to determine unknown frequencies and the potential for confusion when simplifying problems. Overall, the participants clarify the concept of beat frequencies and their implications in tuning scenarios.