Hi uri65, thanks for supporting Chess.com! The auto-timeout protection does = vacation mode. When your games get anywhere from 90 minutes to 0 minutes left, your games will be paused and you will go 'on vacation.' And yes, to play again you will need to cancel vacation mode. This will work on all your games except for any 'No Vacation' tournament games you might be playing. 
I became premium member recently and have few questions about auto-timeout protection:
Is it activated automatically when time left in one of my games comes down to zero?
Does it works by setting my account into vacation mode?
When I want to play again do I have to cancel vacation mode?
Is it true that if I still have vacation days left I can never timeout my games?