Funded accounts have rules that ordinary accounts do not: a maximum daily loss, a maximum overall loss, and usually restrictions on trading around news. Break one and the account is closed. Otto's Prop mode is a dedicated setting built for those rules.
It does three things. It applies a low per-trade risk ceiling, so that total open risk across every position stays well inside a typical daily limit. It applies its own soft daily-loss stop and soft total-loss stop, set below the levels a firm would impose, so that if the day goes badly Otto flattens its positions and pauses before the firm's limit is reached rather than after. And it turns the news filter on permanently, blocking new entries around high-impact releases, since several firms forbid trading in those windows and all of them measure losses through them.
What Prop mode does not do is make a challenge safe. The firm's measurement is the one that counts, and it may include floating losses, it may be taken on equity rather than balance, and a spike through a stop at a release can produce a loss larger than the stop implied. Prop mode reduces the risk of a breach; it cannot remove it, and the account remains your responsibility.
Before using it, read the firm's rules on automated trading, on weekend holding, and on how the daily loss is measured, and compare them with Otto's holding periods and limits. A firm whose weekend rule forbids holding through Saturday is a firm Otto's multi-day positions cannot satisfy in any mode. The page on choosing a prop firm for an EA sets out the comparison.