This quote comes directly from https://www.gmc.com/gmc-life/how-to/when-to-use-four-wheel-drive
AUTOMATIC 4 HI
If road conditions frequently alternate between high- and low-traction areas, consider using the “AUTO” setting found on select GMC electronic transfer cases. This setting allows your GMC to automatically distribute torque to the front axle by anticipating the need for additional traction. Shifting into “auto” engages the front axle, but the transfer case sends power primarily to the rear wheels in normal conditions and the clutches modulate torque forward to provide stability and enhance traction to the vehicle. Although not always optimal for efficiency and wear of your vehicle 4wd driveline, AUTOMATIC 4 HI can be used on any road condition without risk of damaging your vehicle.