Junior Manning is a tool used by schedualing to make up for the lack of planning by crew planning. Junior manning was intended only for emergencies when the company lacked a crew member. It has become, at least at my airline, a crew planning tool.
For example, we still have 6 FO furloughed, but junior manning is still a common occurance.
Auto transfer you are mostly correct. Companies are only allowed to junior man if all reserves has been used also.