When enabled, the auto-upgrade feature will upgrade your existing account hosting package to the tier above when your current package cannot accommodate new accounts.
For example, you currently have 2 accounts on the platform and a 2 account hosting package, your package is now full with no remaining slots to add another account. With auto-upgrade enabled your account hosting package will increase your current 2 account package to the 5 account package. With auto-upgrade disabled you must delete one of your 2 accounts or upgrade manually to the 5 account package or above.