When activating, w3tc does not put a newline character (or carriage return or otherwise) in the .htaccess file - it appends "# BEGIN W3TC Browser Cache" directly at the end of the file regardless if EOF is on newline or not.
In my case, I had no new line, so it appended the htaccess code starting on the same line as "ReriteRule . index.php [L]". This 500 error'd my entire site. error log has "rewriterule bad flag delimiters" due to the hash character at the end of a RewriteRule line.
Recommended fix: include a newline at the beginning the .htaccess append.
Thanks!