It is recording anytime it's on, it uploads recordings only after an incident is noted, or the panic button is pushed.
The incidents can be , speeding, cornering, impact, short stops, tailgating, distracted driving, obstruction of the camera view, and quick acceleration. (smoking, and no seat belt are in there too but not sure if active.) I think that's all of them might be more lol it's a lot. You can ask your manager to go over your score and review what you are getting dinged on.
You do see red lights when lowlights is active.
You aren't being observed in real time as your manager can't just login and watch you driving, however it is observing and recording all the time.
For example if you were looking at your phone or Leo on and off for 10mins your manager will have multiple alerts with clips for the duration of the 10min.