It is covered in the manual.
It does not switch to manual mode - it is a handy way to drop 3 or so gears immediately - something you can't do in manual mode. It will then limit the UP shifting to go no higher than that - for a while, at least.
Say you're in Auto, and it's in 8th. Flick left paddle and it will drop usually to 5th. Then, as you slow down, it may shift (as if in auto) to 4th, 3rd, and so on. Then as you speed up again, it will shift from 3rd to 4th to 5th, again as if in normal auto, BUT IT WON'T go past 5th. If you had manually shifted again using the left paddle to 4th, then it won't upshift past 4th. Up-shift using the right paddle, and now that gear becomes the highest gear to get used.
If you come to a complete stop, it will reset to normal auto mode, and after a few minutes of non-spirited driving it will also reset to normal auto mode. Also, flipping the right paddle for 3 seconds will totally reset to normal auto.
Think of it as 2 things - first, a way to limit the HIGHEST gear for a while, and also as a quick way to drop 3 gears in one shot.