Auto-allocate distributes certificates to learners on a first-come, first-served basis as they complete courses. The admin does not choose who receives a certificate - it is automatic based on completion order. This is the only allocation method available on the Free LMS.
Custom allocate (LMS+ only) lets Super Admins, Admins, and Group Managers manually select which learners receive a certificate from the Certificate Bank. This gives you full control over who is certified and when.