'On by default' setting is confusing

What the "On by default" is intended to control is the ability to open the Same Page Preview iframe whenever content loads. The "preview" is "on" by default instead of being "on" whenever you click the preview button.

For users (while using their device) would be overwhelmed by this, keeping this feature is an important consideration.

Is your issue the nameing of the Setting or it's logical organization?

Mostly the naming, maybe it would be better to change the label to the same one that's used in the preview page: 'Open preview by default'. Looking at the code again, I can't seem to figure out where this setting is being used. Are you sure it's being used at all?

It's intended to be used when the node_edit page is opened to determine if the preview should launch immediately, or when the user clicks the preview button.

Yes, but can you share where exactly in the code this value is read? Because I can't seem to find it.

Its read on /admin/config/content/same-page-preview on page load and stored to localStorage. https://git.drupalcode.org/project/same_page_preview/-/blob/2.1.x/js/adm...

I'd say the interpretation on issue summary is wrong and we should limit the scope of this issue just for the label copy.

Whatever label we choose it should be reflected to config schema on related issue.