Mario Kart 8 Deluxe – What Are the Three Options on the Kart Selection Screen?

On Mario Kart 8 Deluxe you can choose between six settings for items. They are Shells only, Bananas only, Mushrooms only and Bob - ombs only. Then there is All items, No items and Frantic items.

Based on this article written about these two features, it looks like this is how they work:

The auto-accelerate feature seems made for newcomers only, or for those with serious conditions requiring them to use it. A big part of the Mario Kart experience is timing those button presses just right to get the starting bell boost. Letting go of the button to brake can also be used as a strategic play. In short, acceleration is one of the ways that players can exert their control in the game. To give that up seems, at first, unthinkable.

From this, it looks like the game accelerates for you so you don't have to hold down the acceleration button the entire time. However, it prevents you from not accelerating, which is useful strategically.

The smart-steering feature seems to work like this:

Smart steering works in reverse: It guides players’ karts so that they remain on the road at all times, turning them when they need to turn. Smart steering also makes all of the game’s skillful shortcuts inaccessible. It’s a useful option for those in need of additional help with the joysticks.

This prevents you from going off-road, but it also appears to prevent the player from going on shortcuts.