Hi Martin,
The “automatic” setting will use a connected parent as the handle(s).
Also when you create a bone, it automatically has the “deform” option turned on.
This is why when you add a vertex group with the same name (and the armature modifier is set to use vertex groups) it will deform the mesh. If you disable the ‘deform’ option it won’t deform the mesh no matter what you do.
The Ctrl W option is one way you can enable/disable or toggle this option.
The ‘deform’ option is something you more often have to turn off on the bones you don’t want to deform the mesh. Otherwise if you use automatic weights, it’s going to weight the mesh with a whole lot of bones you don’t want to have influence over the mesh.