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The backlight has two modes: automatic and toggle. In automatic mode, the backlight comes on with any screen touch or button press.
If the watch been idle for 60 seconds or more, the backlight can only be activated by a button press.
In toggle mode, you turn the backlight on with a two-finger tap. The backlight stays on until you tap with two fingers again.
By default, the backlight is in automatic mode. You can change the backlight mode as well as the backlight brightness from the settings under General » Backlight.
Backlight brightness affects battery life. The brighter the backlight is, the quicker the battery drains.
When you are not actively using the watch by touching the screen or pressing buttons, the watch goes into a standby mode after one minute. The display is on, but in some low-light conditions, the screen might not be easily readable.
To improve readability in low-light conditions, you can use the standby backlight. This is a low-brightness backlight that is on all the time.
You can toggle the standby backlight on or off from the settings under General » Backlight » Standby.
Even though the standby backlight brightness is quite low, it decreases overall battery life because it is on all the time.