When does JS interpret {} as an empty block instead of an empty object?

Let’s look at the language grammar, shall we? Section 12, Statements:

Statement :
    Block
    VariableStatement
    EmptyStatement
    ExpressionStatement
    ...lots of other stuff...

That’s a very fancy way of saying that a statement can be a block, a variable statement, an empty statement, an expression statement, or lots of other stuff. Notice that the first option there is a ‘Block’:

Block :
    { StatementList(opt) }

StatementList :
    Statement
    StatementList Statement

Which is again, a fancy way of saying that a block is a {, optionally followed by a bunch of statements, followed by a }.

And that’s what you see in your example: Before the JavaScript parser thinks that what you have could be an object literal (which is defined somewhere under ExpressionStatement, the 4th thing a ‘Statement’ could be), it first thinks that you have a ‘Block’.

Edit: If you want, you can see it live in a JavaScript engine’s source code:

• In V8, Chrome’s JavaScript engine, we go into Parser::ParseStatement. The first thing it checks is whether we’re on a {, and if it does, parses as block.
• In SpiderMonkey, Firefox’s JavaScript engine, we go from Parser::statement to again see the first check being against a { and parsing it as a block statement.

Regarding your second question, that’s been covered to great detail on this question. To summarise in a sentence: Node.js treats your input as if it were an expression (thus it can’t be a ‘Block’), while Firebug/Chrome dev tools treat it like a ‘Statement’.