Your lower circled valve is the Suction valve; it selects whether water is pulled from the spa or the pool. The upper valve is the Return valve; it selects whether water is pumped to the spa or the pool.
The labeling you added to the photo seems slightly incorrect. The "Skimmer" label should be "Spa Suction", and the "Suction" label should be "Pool Suction" (or a more specific label -- see note 1 below). Your "Jets" and "Pool" labels look right, but for ease of understanding the valves, you may want to think of them as "Spa Return" and "Pool Return".
In Spa mode, the handles of both circled valves should point to the left (so the side marked "OFF" points to the right). This will open the Spa Suction and Spa Return pipes, so water will be pulled from the spa and returned to the spa.
In Pool mode, the handles should both point to the right. This will open the Pool Suction and Pool Return pipes, so water will be pulled from the pool and returned to the pool. Note that because of the horizontal bypass pipe below the valve, some water will also flow to the spa in this mode (and then it will spill over into the pool). The idea is that if you just keep the system in Pool mode, the spa water will get circulated, too.
If the spa is draining to the level of the lower jets whenever the system is off, it's possible that the check valve in the center of that bypass pipe is bad, and it's allowing water to flow backward from the jets, through the bypass, and into the pool.
If you want spillover from the spa to the pool without having to run the pump so high, your automation should have a Spillway mode that points the handle of the upper valve to the left and the handle of the lower valve to the right, so water will be pulled from the pool and returned to the spa. That's what's shown in your photo.
Two final notes:
- The right-hand side of the lower valve splits into two pipes. One of those is a pool skimmer, the other is probably the pool main drain (but might be a second pool skimmer if you happen to have two). The manual valve between them adjusts how much water is pulled from each. You may want to watch the water flowing into the skimmer while you turn that manual valve, so you can give each pipe a specific label instead of treating them collectively as generic "Pool Suction".
- If your automation is moving a valve to the wrong side in the various modes, find the little toggle switch on the back of the valve actuator. It's a 3-way electrical switch labeled ON1 - OFF - ON2, and it can get accidentally moved if someone is messing around with the valves and not paying attention. To reverse the direction of the valve, move the switch from ON1 to ON2 or vice-versa. Make sure you test all modes -- Pool, Spa, and especially Spillway -- to make sure that they're correct.