Malted Oats differ from the far more common Flaked Oats in one fundamental way: they're actually malted — steeped, germinated, and kilned like barley — rather than simply steamed and rolled. That process gives them real diastatic power of their own (roughly 60 °Lintner), something flaked oats, which skip malting entirely, never carry.
The flavour contribution is similar in kind to flaked oats — a silky, smooth body and mild, faintly sweet grainy character — but some brewers report Malted Oats reading slightly more refined or complex, likely a result of the flavour compounds malting develops that a purely mechanical flaking process doesn't produce. Because they carry their own enzyme content, Malted Oats put less demand on a base malt's conversion capacity than an equivalent weight of flaked oats would, which matters more in a recipe already pushing several low-diastatic specialty malts at once. Hazy/New England IPA recipes have increasingly experimented with Malted Oats as a partial or full replacement for flaked oats, chasing a marginally different texture and a cleaner mash; it remains less widely stocked than flaked oats, so availability is often the deciding factor over any strong flavour preference. Where both are on hand, some recipes split the addition between the two, layering malted oats' own converting power against flaked oats' slightly cheaper, more widely available texture contribution to the same batch.