The system is light, small and mechanically tidy. In extreme conditions, vehicles with such systems can be in a ditch or in other serious trouble before the back wheels assist. Ford says that because the engagement is so fast, that wouldn't happen. Older-design but heavier 4x4 systems keep at least some power going to all wheels, so a loss of traction isn't necessary to transfer power. On, selected by a dashboard knob.
Auto means the system decides when and whether to power the back wheels.
On means all four wheels are driving all the time, half the power going to each end of the vehicle. In Escape, that's a temporary setting for use on slick, demanding surfaces only. Using it on dry roads causes handling problems and increases wear on tires and gears. On sale late summer or early fall. Four-wheel drive is optional on both models.