As above; you can select whatever you like for this option but you get Auto.
There's probably easier ways but I detected this by putting a trap in the url_get_final_display_type() function in locallib (mod/url/locallib.php). When displaying the $url object the 'display' field is always zero regardless of the selection. I tried this with a variety of URLs (just in case). Some with extensions, some not. Same result.