This option is available in version 9 onwards, and enables groups of similar nodes to be collapsed into a single node that represents that subtree. The maximum distance within the subtrees is determined by the Subtree Distance slider. Use this option to help navigate trees with many nodes and tips.
Collapsed nodes are labeled with the name of one of the tips, a count of how many tips the subtree contains, and the maximum distance between the top of the subtree and any of the tips within it. Double-clicking a node in a tree will force it to expand or contract. Automatically Collapse Subtrees will not override this state. To reset the state of double-clicked nodes in the tree, click Reset state of X nodes. X is the number of nodes with a manually expanded or collapsed state.