The terminal voltage basically decide where it starts in the solar mode.
In the morning, a solar charged battery will be around 12.8V if it was unloaded all night. So it starts off in Bulk, until it reaches Absorption. It stays at absorption for a time, then drops back to float.
As the sun goes down or shortly into night, the battery voltage drops below float.
If the PV voltage is below say 66% of the operating voltage, 99% of the time it is a pretty safe bet it is entering 'night'.
The section you mention is for solar PWM charging. Using the controller in the Diversion use will disable most of those specific abilities.
The primary dip switches decide what effect the secondary switches will have.
If it is set in Diversion mode instead of Solar, the rest of the switches control different things.
Basically, you are asking about a Day/Night function controlled by switch #8, but it has 3 different functions depending on the switches before it.
(see page 2, section 1.3)
It can not do lighting control in the diversion mode.
G-