The book says that the effect of a Character Trait is decided in game by the players and GM. My understanding is that this should occur organically through actual play. One thing I was wondering though. When a situation occurs in which a Ct’s use is appropriate the Ct changes into a Call-on or a Die trait, right? 
My interpretation of the character traits is that they don’t have a mechanical effect aside from providing persona artha to the character that personifies them. They’re mostly used to describe the character and their personality.
Looking at the brick, it says so on p. 330, “A character trait illustrates a prominent aspect of a character’s psychological or physiological make-up—something that affects how the character will be role played at the table… Character traits do not modify rolls.”
As regards character traits being defined by the group, I think it is mostly there so as not to force the group into a particular trope/stereotype. You’re free to interpret them in a way that fits your play style, since it affects role-playing.
So basically a player can just ‘activate’ them to make the story twist in an unexpected direction and, thereby, gain artha? Ok that makes sense.
Although I’m still wondering how to use my GM-FON’s “Mustache” character trait to take the story in an unexpected direct and earn Artha…
Right. You role-play the character trait. If by doing so you guide the story in an interesting direction, you earn a Fate point. Playing your character traits hard is a great way to earn Artha!
I must say trying to figure out how to make that trait relevant during play piqued my interest and this is what I came up with:
Maybe there’s a crime that’s been committed and the only living witness swears that the criminal had a mustache, much like the GM-FoN!
A love interest (if there are any) is repulsed completely by his mustache.
It’d probably help knowing more about the setting, but that’s the two I can think of.
I think you need to twirl it a lot (preferably while wearing an arrogant look on your face). This will generate electricity or artha, depending on how well it is tuned.