SteVTEC said:
A true limited slip differential does work "automatically", and hence it's not changing the definition sufficiently.
Without putting too fine a point on it, whether or not you think it's sufficient to change the meaning isn't the litmus test for deception.

Again, a better argument would have to be put forward based on whether or not a reasonable person would be misled by Toyota's use of "limited slip differential" in this context. I certainly wouldn't be, no more than I was misled by VW's use of "electronic differential lock" on my last VW. I hope you wouldn't be either. Toyota's use of the "auto" word certainly would make me investigate further if I cared about that feature.
SteVTEC said:
Maybe there's some subtle differences, but the concept of operation between the Camry and RAV4 are the same. Open differential plus traction control / ABS to control wheelspin. On the Camry it's just VSC/TRAC, but on the RAV now you have a "Limited Slip Differential".
Seems pretty clear from the information available that although the RAV4 and Camry both have VSC & TRAC, on the RAV4 the "Auto LSD" is a further function of TRAC that's intended to be used differently, as noted above, and is activated manually by the driver. I would draw a parallel example between the Matrix AWD and the RAV4. Although both use the same AWD system, the Matrix isn't equipped with the "Lock" button on the dash, which allows the RAV4's AWD system to be put into a mode unavailable on the Matrix. Auto LSD is also offered on the Tundra, Tacoma, 4Runner and FJ Cruiser. I'm not aware of any Toyota car that has it.
SteVTEC said:
If it says on the damned spec sheets that something has a "Limited Slip Differential" (auto or not), then I fully expect that the car will have a real hardware based internally limited slip differential, as that's generically what the term has come to mean. You can't be guilty of not doing enough research when Toyota is lying right out their ass on this, and assuming that their customers will be stupid enough to not know the difference. Any case brought wouldn't necessarily have to come to trial. Things like these are commonly settled out of court just to keep things quiet and avoid all of the bad publicity and embarassment.
It all hinges on whether your expectation is a reasonable one, based on Toyota's description and information available. Toyota is clearly using "Auto LSD" as their name for what's generically widely known as an electronic LSD. "Fake traction control-based simulated LSD" doesn't quite have the same ring to it to the ears of a marketing department.
So we all agree it's not a real LSD. Whether Toyota's name for it is merely potentially confusing or a blatant, shameless bald-faced lie is entirely a matter of opinion. But hey, that's where the courts come in, isn't it? 8)