The “OD” means over drive. It’s the last gear in your transmission. When the indicator shows as “off”, it means the transmission won’t go into that gear.

Overdrive provides a mechanical advantage for the engine to run at a slower speed when traveling at highway speeds. This allows for better fuel economy. As I stated, it is the last gear in the transmission and provides a better than 1:1 ratio. Depending on the car, it will be around .70:1 (or thereabouts).

As far as whether it’s on/off by default, you should allow the vehicle to achieve O/D whenever it wants to, which will allow the best fuel economy. It appears the button on your shifter is actually a switch. If you push it, it changes position and therefore the function it will allow. Since it does this, there’s no real “default”. If it were just a push button and the computer decides your actions, then there would be a default setting. Like I said, leave O/D on to operate normally. Modern vehicle computers are smart enough to know when to use O/D and when not to.