The purpose of a bypass is to ensure that there is circulation available to for the boiler pump overrun (the pump remains running for a period of time once thermostats, programmer are satisfied repeated boiler fire up which shortens the life expectancy of the boiler and is very efficient on fuel usage) the main reason it is best practice to install the bypass as far away from the boiler as practicable is to dissipate as much heat from the boilers return as possible.
An automatic bypass, for want of a better way to explain it, sense the resistance within the system caused by the pump straining against a closed circuit and opens accordingly, this is more cost efficient than have a gatevalve or such like permanently open as this will cause a heat sink whilst all thermostats are demanding
It is also good practice to install an automatic bypass on a system even when one radiator has no TRV's install on it ass this radiator can be, and often is, turned off by the end user.
A TRV is not a boiler inter lock as it has no way of informing the boiler that a satisfactory heat has been attained and it no longer needs to fire up, in theory with the programmer calling for central heating on a hot day when all the TRV's are closed the3se boiler will fire up for central heating, it goes with out saying that this is a waste of fuel.
On a conventional system (y or S plan) the auto matic bypass is sited on the flow between the boiler and the zone valve(s) and the primary flow to achieve the above.
It is my opinion that an automatic bypass should be fitted in the appropriate place on ALL modern boilers.
i hope this explains it ok but am sure everyone else will be all over me like a bad suit disagreeing