What is the purpose of Auto Size with Callout?
To cause the label fonts to auto-size and best fit in a region, and if they do not fit, generate a callout.
When is Auto Size with Callout active?
When a map layer is selected and labels are turned on.
How do I access Auto Size with Callout?
On the LABELS tab, in the Label Placement group, click Label Rules, and click Auto Size with Callout.