Automatic Resolution Change -> Down?

Does the Vero 4K+ change to 720p if the material is 720p, but the GUI is set to 1080p? I believe native Kodi v17 behavior is changing in the upwards direction only (i.e. GUI 720p, Material 1080p, then a resolution switch happens)

There is no downshift with v17. If you want this, try Leia v18.

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Should I just have the GUI at 720p? Will it do both resolution and refresh rate switching properly?

yes

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Once v18 based OSMC is released, I hope this becomes moot.

It will.

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