• Local contact in cleats reduces absolute permeability and increases starting pressure, impacting two-phase flow.
• Microfluidic experiments reveal interface jumps in methane-water flow due to porosity alterations from local contact.
• Jumping events cause additional energy dissipation, leading to potential overestimation of relative permeability in traditional models.
• A dual-scale observation technique captures both micro-scale interface morphology and mesoscale flow characteristics in cleat systems.
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