I'm confused about the "A/C auto switching operation" setting. As far as I can tell, it controls switching between outside and recirculated air. Is that correct?
Toyota’s Repair Manual (available by subscription to techinfo.toyota.com), in the topic Vehicle Interior: Heating/Air Conditioning: Air Conditioning System: Customize Parameters, says that the Auto A/C Mode setting, under Climate Settings, controls the “Function to turn the A/C on automatically by pressing the AUTO button when the blower is on and the A/C is off.” The default setting is On, and it can be changed to Off, if desired.
As @Elektroingenieur says, it basically means that if you press the AUTO button and the A/C light is off, it will also turn the A/C on (along with the automatic operation).