The transfer case does not include a differential. That means, in any 4wd mode the front and rear wheels turn at the same speed. This is typical in trucks because the higher loads would generate heat and require lots of force to be managed. Therefore, 4wd is only engaged when the surface is slippery. There are some steering advantages of driving the front wheels for handling on regular pavement, and for getting large amounts of power to the ground. That is not what this is designed for.
In the old days, the transfer case was shifted with a lever. Now electrically. With the various wheel speed, accelerometer, and gyro sensors used for stability control and ABS, the truck can determine when 4wd is needed. Auto 4wd runs in 2WD and simply shifts into 4wd Hi when excessive slip is detected. Since is a locked situation without a center differential, this is only going to occur when the slip is significant and probably at lower speeds, although I don't know the specific programming.
The rest of the time it is in 2WD. For most people, 2WD is where the truck will spend nearly its entire life.
4WD Hi has a 1:1 gear ratio. 4WD Lo adds an extra 2.64 reduction. That means the redline in 1st with the 5.7L and 3.92 drops from 29mph to 11mph. 2000 rpm goes from 10mph to under 4mph. It is about having the engine in its operating range when going slow in slippery or challenging conditions. For reference, the Jeep Rubicon has a 4.1:1 ratio in the transfer case.
The electrically locking rear complements the transfer case, locking both rear wheels together. Off-roaders often have a locking front differential also, and it comes standard with the Rubicon.
In those challenging, slow, slippery conditions, off-roaders often carry traction boards. May off-road/camping racks include storage for them. Shown in the picture. If you need 4WD Lo and a locking rear diff, you probably need traction boards also.
On top of that, the RAM already has traction control with what FCA calls Brake Limited Differential to act as a simulated limited-slip. A technology Porsche uses also.
Net: for most purposes, 2WD and 4WD Auto are the same and what the truck should be in.
