To clear up a few things:
Limit Remote Bitrate affects each individual stream as the maximum it can use, and is included in deciding how to play media (Direct Play, Direct Stream or Transcode).
Internet upload speed sets your maximum upload speed (of which Plex will only use 80%, so as to not severely impact other things on the connection).
Auto adjust would only kick in if the decision has already been made to transcode. If it’ll Direct Play within the bandwidth limits a server owner has selected, then it’ll just direct play. If it has to transcode, then it can adjust the quality based on the internet connection, or how many users are currently streaming, to fairly share the bandwidth.
2Mbps is the default remote quality on clients, and Auto Adjust is defaulted to off as of writing.
Auto Adjust does that kind of Netflix magic where it sees what the connection between client and server is like (completely securely, between that client and server and nothing else), and adjusts the quality of the transcode dynamically between 0.7Mbps and 20Mbps, including both decreasing and increasing quality.
