Auto size is a smart way to resize the text. You will be able to experiment with text of varying lengths without compromising the integrity of your design.
Text element with Auto Size on will keep its inside text variants changing their size to always fit the box. It makes sure when a text element being replaced with other text assets of varying length, it still looks good.
When you turn the Auto Size on, the font size selector will change to percentage-based. It represents the percentage of the area the text occupied in the text element box.