I do not have that exact model, however, I have others and UPS mode typically involves how "Fast" the inverter will "transfer". The inverter is passing through the grid power while monitoring it and within 16ms of detecting an outage (one sine wave of your AC power) it starts using its battery to generates its own AC power, disconnects the grid, and outputs it own generated 120VAC.
The time to actually switch from grid to internally generated power is called the transfer time.
looking at the growatt tech specs I see it shows a transfer time of 10ms for UPS mode(they call it for personal computers) and 20ms for appliance mode.
If the growwatt in UPS mode was always generating and outputing 120VAC..then the transfer time would be zero!! so we know its not always generating the output 120vac if I were to take a guess based on the spec.
