I think that you may need to distinguish between auto ( Wordclock1-2 Auto) and " Audio" synch. Auto basically only automatically switches between the 44.1kHz base clock and the 48kHz base clock clock in accordance with the incoming data . Synchronisation per se is a related but somewhat different animal and, beyond just selecting the correct frequency, relates to e.g. 2 nominally identical timing cycles running on different machines ( e.g. CD transport and DAC or TV and DAC) so that each starts and concludes at the same point in time (i.e. are synchronised). If the cycles start at different points in time this may eventually result in glitches as the cycles drift further apart over time. However this synchronisation cannot be done where the machines cannot share the same reference clock for example because one or both does (do) not have wordclock inputs. So in order to avoid potential glitches the clock embedded in the source’s AES3 interface ( which includes S/Pdif) is used to “time” the DAC ( “Audio” synch).
I found that hard to explain so I hope my attempt is adequate.