krm97 wrote:
Given that it is select by channel, how does it determine which rescue function one wants to use, like Auto Bailout via altitude function?
By channel

Select by channel means you can assign its own channel to each stabilization function and use them seperately or even simultaneously. In your case you have channel 8 = F: Rescue (Automatic), so that's what it controls.
On the other hand if you set stabi function to Rescue (Automatic) in the stabi tab as you initially had, that's the only stabi function you can use and you must activate it by assigning a channel to F: Stabi Function instead. In my opinion this option should be clearly marked as deprecated, it's there for legacy support of units still configured this way but there's no point in doing it and it's confusing to a lot of people.