The EJ205 heads have a smaller bore than the EJ257/EJ255 shortblock. That means that the 'dome' of the combustion chamber doesn't fit perfectly on top of the piston. So rather than the combustion chamber being a smooth dome, there's a sharp edge that is a detonation hotspot and screws up the combustion.
$300 gets you machining to match the dome of the head with the larger bore of the shortblock, making the engine far less prone to detonation per Maxwell Power.
$3000 gets you lots of machining of the intake and exhaust ports (what people usually refer to as 'headwork'). That's not what Maxwell is talking about. He's referring to a much simpler, much cheaper procedure specific to the hybrid engine rather than generic expensive head work.