Per talking to someone from the company that makes this device, this seems to be how this particular RAID controller works:
Initial setup:
- Plug in all drives, connections, and power (separate power supply) select RAID mode on dial, press Change Mode button.
This simply configures the mode so anything viewing will see the drives as one volume. Drives still need to be formatted to get a file system on the volume.
If a drive fails:
The buzzer onboard will beep and red LED on front will be solid indicating there is a drive failure. If leds are hooked up individually to each header for each drive, the specified LED will light up showing which drive has failed.
Power down unit and replace bad drive with new one.
Turn unit back on. Red light on front will now be blinking, rather than on solid. This indicates that the new drive is being written to and being rebuilt. No pressing of buttons or use of software needed.
Doing offsite backups with this unit:
Following the same procedure for if a drive fails, you can unplug a drive and store it in another location. The unit will see this as a missing drive.
Power unit off and install a new drive in place. Red light will be blinking indicating that the new drive is being written to, rebuilding the RAID.
I confirmed with the company and there is a small partition that exists on each drive when it is built that is hidden from the rest of the drive that contains the RAID volume. When the device sees a drive missing this section, and the data doesn't match what it is looking for, then it assumes that drive is new.
Different RAID Types with this device
The different RAID types are slightly different from their normal definitions for this device.
RAID 10

According to the company, the drives are not "paired" like in a traditional RAID 10 setup (where each pair would be a RAID 1 and then a RAID 0 layer on top of that). They are all "equal" drives. In this setup you can need 4 drives and 2 can fail at max and still allow data to be safe. It does not matter which 2 in combination. Capacity seen from the resulting RAID = about half of the total capacity of the drives put together.
RAID 5

So on the RAID 5 configurations, data is stored on a minimum of 3 drives (in theory can be an infinite maximum). For this particular unit, it was confirmed that each drive contains the parity and the data is striped across them all. In this configuration, you can lose one drive and still have your data backed up. It does not matter which drive is lost. Capacity = approximately 90% of the total capacity. The parity on a RAID 5 = about 10% of the total drive capacity.
RAID 3

Raid 3 stripes its data and has parity data like RAID 5. Instead of the parity scattered among the drives, it has one drive that contains the parity. This makes it a slower option in general than a RAID 5 or RAID 10 but still is an option for this unit. Raid 3 needs a minimum of 3 drives as well and will allow one drive failure with keeping data safe. Capacity on a RAID 3 is the total drive capacity of all of the drives minus the one being used for parity.
"Clone"
Clone on this device is the same thing as a RAID1

In a RAID 1 setup, every drive connected is a copy of the other. Since this unit supports 5 drives, you would have 5 times the redundancy. Your RAID storage space would = 1/5 of the total capacity. You could lose a maximum of 4 drives and still have your data backed up safely.
RAID 0

RAID 0 only does striping. This will improve performance as data read / writes are spread across multiple drives but no data is backed up. Minimum drives = 2. Maximum = unlimited. Data capacity = total drive capacity.
Large
On this device the "Large" mode will make all of the drives just show up by themselves as they are. In this mode the device just acts like a HUB and does no RAID at all.
1If something as fundamental as this isn't clear, do you really want to be risking your data with this product? – djsmiley2k TMW – 2017-03-09T20:06:08.670
@djsmiley2k Well just because I don't understand the interface doesn't mean the product is poor in performance. – Eric F – 2017-03-09T20:07:52.837
No, but I like products which I can understand, no matter how well they perform. A Ferrari who's steering wheel is back to front isn't much use to anyone. – djsmiley2k TMW – 2017-03-09T20:29:16.847
But if you owned a bicycle that is easy to use but low in performance, and then learned to drive that Ferrari, you would be much better off in the long run with the Ferrari. I am doing as you state and making sure I understand and test the product before I use i – Eric F – 2017-03-09T21:03:11.993