Along with James Retell, Roger Remington, and Jason Mattingley, I recently published a paper in Current Biology in which we describe "remapped crowding". You can read about that article and effect here and here.
Denis Pelli and Patrick Cavanagh have just published a Dispatch in Current Biology discussing my article (link below), and what it means for trans-saccadic object recognition. I spent the better part of my PhD reading articles published by Pelli and (separately) by Cavanagh, so reading something they've written together about my work is novel.
Highlighted in the figure of their paper, Pelli and Cavanagh describe two ways in which remapped crowding may come about. Under both hypotheses, the location attributed to a target object is erroneously assigned to two different locations just prior to a saccade. One location is the object's actual position, and the other location is the predicted, post-saccadic location of the object. The basic effect we described in our paper was that this object becomes difficult to identify when distractors are placed at the predicted location of the object. One possible explanation for such "remapped crowding" is that remapping may shift the representation of an object's features prior to object recognition (Figure 1E of Pelli & Cavanagh). Target- and distractor-object elements appear jumbled and imperceptible because all features are necessarily mixed in a common (early?) processing area. Alternatively (Figure 1F), relatively accurately processed featural information may be drawn from two spatially separate locations simultaneously during remapping. Because the visual system is trying to make sense of multiple conflicting inputs, the ability to distinguish target and distractor becomes more difficult.
In our paper, in the second to last paragraph of the Discussion, we tended to favour the latter of the two suggestions because it seems more parsimonious based on previous work. However, the precise answer to the question will only come from further experimentation across a broad range of disciplines, and from independent lab groups. Some of my current work in psychophysics focusses on answering this question, but, for whichever hypothesis the behavioural research favours, we also need a plausible neural mechanism from the neurophysiology folk.
Here's a link to Pelli and Cavanagh's full article (email me if you don't have access): http://www.sciencedirect.com/science/article/pii/S0960982213004302
Pelli, D. G., & Cavanagh, P. (2013). Object Recognition: Visual Crowding from a Distance. Current Biology, 23(11), R478–R479. doi:10.1016/j.cub.2013.04.022
(commentary on: Harrison, W. J., Retell, J. D., Remington, R. W., & Mattingley, J. B. (2013). Visual Crowding at a Distance during Predictive Remapping. Current Biology, 23(9), 793–798. doi:10.1016/j.cub.2013.03.050 )