When you specify a reference point, you are specifying the direction in which a text frame is resized when you apply an auto-size option. The reference point you choose on the selected object will remain fixed in the same position while resizing takes place.
Here are some examples of how the reference point affects the auto-resizing:
|Resize Style||Reference Point||Result|
The other reference points would only be used with one of the Height and Width auto-size options.