Improve the `auto_apply_actions` config in `AgentSpec`

[suhaibmujahid]

Instead of having two options, we could replace them with something like action_apply_mode. We need a clearer design for this config, but we can go ahead and merge with this PR for now and improve the config later. We do not want to delay this further.

Originally posted by @suhaibmujahid in #6439 (comment)