"Switch to Auto" is a tool to set specific availability for the calendar you are viewing. Basically, it’s an easy way to change your calendar settings to reflect the greatest common denominator of its available appointments.
For example, if the general setting of "Display times for appointments every 60 minutes for all calendars" is set, but the calendar you are viewing has 15 minute appointments available for scheduling and you click "switch to auto", the setting will detect that and then show appointments every 15 minutes. This is a great way to have specific availability for that calendar and appointment types on that calendar.