from what i understand, it's more about the moderation.
let's say:
person 1 - rank 1: 88% internally
coolcat - rank 2: 87% internally
person 1 - 65% in hsc
coolcat - 75% in hsc
your INTERNAL mark would be moderated. so person 1, despite performing poorly, would get the highest external mark that has been achieved in your cohort in the hsc as their INTERNAL mark, while you would get the second highest.
as for your EXTERNAL mark, nothing changes - you don't get the other person's external mark. external marks are only dependent on scaling/ how well your cohort does i think.
again, you would not get the 65% for your internals EXCEPT if it was indeed the 2nd highest external mark of your cohort.
this is all from my own understanding, someone pls correct me if i'm wrong