How is that going to work and how will end users be able to know that they can't plug a 5+ watt card on a incompatible housing ?
In the current standard, any card needing more than 5W must be a Type III (that's ~double thickness), and all Type III housings are both electrically and thermally capable of 10W. High-power card doesn't physically fit in low-power slots.
Or do they negotiate over some bit so the card knows if it can boost beyond 5 watts or not ?
That's the idea with the upcoming revision -- by default, the limits still apply (Type III cards 10W, Type I/II 5W), so you still can't make a Type II card that needs 10W to run. But you can make a Type II card that meets the 5W limit by severe down-clocking; then a housing can offer CPU cards a higher limit, allowing them to up-clock or use more cores.