The inserted lines are in fact paragraph borders (look in the Borders and Shading dialog box). That is why the AutoFormat As You Type option mentions borders.
The difference between AutoFormat and AutoFormat As You Type is as follows: AutoFormat is a command you can run to "fix" the formatting in a document with pasted content. (You can add AutoFormat to the Quick Access Toolbar in recent versions of Word.)
AutoFormat As You Type, on the other hand, occurs during typing, without user intervention.
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Stefan Blom
Microsoft Word MVP
Microsoft 365 apps for business
Windows 11 Professional
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