Bernie,
I believe the AUTO mode is intended to run with 120V as primary, automatically switching to propane if the 120V service drops for some reason. The reason could be a power failure, or a circuit breaker trips, or you unplug from shore power to tow to the next destination.
The Manual GAS mode is to run on propane. Because it's a 'manual' mode, if you run out of propane, I doubt it would automatically switch to 120V. Having the manual GAS mode allows you to manage power usage. If for example you're plugged into a 30 amp pedestal, forcing the fridge to run on propane only allows you to use the available power on other appliances. But of course, you need to manage the propane supply.
I think some Norcolds also have a manual Electric mode, where it will not switch to propane if the power drops. I'm not sure what scenario they're envisioning where that would be useful.
And of course, you need 12V DC for the control board regardless of which mode you're in.