I think the best thing to help understand where these factors come from is rooted in statistics itself.
"Typical" stress-life or strain-life data curves are 50-50 (or average) curves. That is, they are at 50% reliability and 50% confidence interval.
The "scatter factor" that needs to be applied should be the ratio of 50-50 life to 99-95 life or whatever statistical basis is being mandated.
These factors will be highly sensitive to statistical characteristics such as sample size, standard error of the estimate, etc.
You can check this for yourself by selecting some stress-life data that has those type of metrics listed. Then find a table of k-factors for one sided tolerance intervals for a log-normal distribution and compute the 50-50 life and the 99-95 life. If there is appreciable variance in the data you can end up with a big factor.
This won't be exactly correct if the example life you check is HCF because with fatigue data, the variance actually increases with life. More appropriate would be to apply a weight function like in NACA CR-2586, or use a Weibull analysis.
But you can get the idea. Those "scatter" factors recommended by the FAA are "typical" or "blanket" numbers which are meant to apply to broad classes of material.
But I would caution anyone that they do not apply to everything. It is entirely possible that your source of data (including data from MMPDS) can have high enough standard error or poor sample size to invalidate those "typical" factors.
Also remember that this factor we're discussing will only account for variability of life with respect to stress level. It does not inherently account for other things like stress ratio, type of loading, or surface condition. In my experience, "scatter factor" generally refers to a total product of all reduction factors that account for any differences between the test data configuration and the real structure.
Finally, while 14 CFR 25.571 does in fact say:
"Inspection thresholds for the following types of structure must be established based on crack growth analyses and/or tests, assuming the structure contains an initial flaw of the maximum probable size that could exist as a result of manufacturing or service-induced damage"
But you also have to consider which ACO you are working under and if they have any specific guidance. For example, SACO provides guidance for establishing an inspection THRESHOLD which considers statistically based stress-life or strain-life as one datapoint. So depending on your situation, these calculations will be required.
Keep em' Flying
//Fight Corrosion!