I did a test on my 2001 3.0i (GM 5-speed AT, completely stock) last night while on a drive:

Driving along in M4, I came to a stop at a stop light without shifting manually. As I did that, it automatically shifted to M3 and M2, and stayed in M2 while I was sitting at the light for a few seconds. Then I drove away in M2. I did not take it to red line, but I can believe it would have stayed there until I hit red line.

So for my '01 stock 5-speed GM AT, it drops automatically to M2 when needed.

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2001 X5 3.0i, 203k miles, AT, owned since 2014