Conclusion:

In most cases “Auto Ref Level” should be activated.
It automatically optimizes ADI’s dynamic range / SNR for each level situation.
The user doesn’t need to care.

Explanations:

Auto Ref Level’s “dBr” value is referenced to the maximum nominal output level of ADI-2 DAC.
This is +13 dBu on the RCA, and +19 dBu on the XLR.

The switching steps displayed in the Volume screen are referenced to the RCA out, the real level on the XLR is 6 dB higher than shown, see table below:

Displayed nominal Ref Level and 0 dBFS full scale output -
at RCA (resulting level at XLR)
-5 dBu (= XLR +1 dBu),
+1 dBu (= XLR +7 dBu),
+7 dBu (= XLR +13 dBu)
+13 dBu (=XLR + 19 dBu)

Additionally, at the rear outs, there’s a headroom of ca. 3 dB.
Setting Volume to +3 dB (or +3 dBr) still gives a clean, undistorted output.

Auto Ref Level uses an intelligent combination of digital volume control and analog reference levels switching to achieve a volume control in steps of 0.5 dB.

At the +/- 6 dB analog ref level switching points the digital control executes jumps of -5.5 dB (at Volume up) or +5.5 dB (at Volume down) to get this.
So the internal digital level only varies by 5.5 dB, while the analog output can be attenuated by 23.5 dB.

The goal is to keep the digital / DAC chip’s level close to full scale over a volume control range of ca. 24 dB, running the DAC chip in it’s highest dynamic range.

Auto Ref Level even takes into account level changes from ADI-2‘s DSP functions.
This, together with an internal digital headroom of 24 dB, prevents overloading of the DAC chip, e.g. caused by PEQ boosts.