In a LOCALIZE calculation, localized M.O.'s (LMO's) on an atom that has two or three lone pairs are split into one LMO that is mainly sigma and one or two LMO's that are mainly pi. When RABBIT is present, a LOCAL calculation will be done, and these LMO's will be replaced with hybrid LMO's that have equal amounts of sigma character in each M.O.
The resulting LMO's are commonly referred to as rabbit-ears because of their shape, although they really look more like ear-muffs than rabbit-ears.
All three sets of M.O.'s, canonical, localized, and localized with RABBIT, are equivalent, in that the sets are related to each other by unitary transforms. Use whichever set best first the current needs.