Auto Clutch? I dont get this...

I have Auto Gearbox and Auto Clutch turned off... and yet my stick shift vehicles all gear up and down without needing me to engage the clutch. The clutch does work - disengages the motor - but it's simply not necessary.
Is that some kind of racing design? How can I play without any assistance?

 

I'm not entirely sure but I believe AC simulates clutchless shifting, which is basically the same as normal shifting, but without the clutch. Some argue it is faster, but the catch is that you have to match the revs almost perfectly, and I think the difference in time is probably very small and not worth it when a botched gear change can result in massive time loss and gear box damage. This works in real cars, but as I said you run the risk of damaging the gearbox.

You'll probably find that you are experiencing this "auto-clutch" effect because you already rev match when using the clutch, and if you do a lot of driving/racing with a manual gearbox then you probably already rev match well enough to shift without the clutch. However, if you deliberately mess up your rev matching (in AC, don't do it in the real world!), then you will hear the gears grind. ATM, AC doesn't have any (mechanical) damage, but I think there will be in the future, so then it wouldn't be a good idea to shift without the clutch.

This video demonstrates clutchless shifting:

 

So....what does the Automatic Clutch in the settings do? Remember...I had it OFF

 

If you turn on the live pedal telemetry you can see that when you shift the auto clutch engages, the gear shifts, and then the auto-clutch disengages.
~Bailey