I cannot answer why it charged the card the full amount, but I can answer with regards to the config setting you pointing to.
The idea of an authorization is to freeze available funds on someones card from the time they place the order, until the time you charge the card. This way, said customer cannot order from you, almost max out their card, go somewhere else and really max out the card. Thus when you are ready to ship, invoice and charge the card, your funds will be available - since said user could not max out.
Base Epicor does an “Authorization” at the time of the order. No funds change hands, but there is a freeze on the card holders card in the amount until the authorization is cleared - usually through a “capture” of funds. The “capture” ootb is executed in shipping during the pack out when the package has been freighted and closed. Epicor then creates an invoice and “captures” funds from the card holder.
Somewhere in your configuration is also a parameter for how long your “authorizations” last. Say 3 days - although, careful, because 3 day weekends can cause havoc if the “authorization” is freed. Most “authorizations” are set for 30 days.
What I am not aware of is the “Allow Deposit Payment on Sales Order”. This strikes me as allowing the “capture” of all funds, whether shipped or not. The parts not shipped collected amount would be treated as a deposit - maybe?