Based on Smartsheet's documentation and the logic of the User Subscription Model (USM), here is the distinction and how these two features work together:
- The "Two-Strikes" Cycle (The Old Default): This was the original, more aggressive USM behavior. The system tracked user activity and, after a couple of provisional cycles, it would force a paid license on the assumption that "this person clearly needs to be a paid user." This put the burden entirely on the System Admin to manually downgrade users every single time to avoid charges. This is the process that caused so much concern for clients like Sir Marlon.
- The "Auto-Downgrade" Setting (The New Default & The Ultimate Control): This new feature was introduced by Smartsheet precisely because of feedback about the "two-strikes" rule being too punitive and creating unwanted charges. This setting essentially overrides the final, automatic part of the old cycle.
