New Fuji user in need of advice on shooting settings.

Nothing stops me (or you) from dialing in what we believe is the correct amount of under- or sometimes over-exposure compensation in one-third stops - and still utilize the Auto DR to ensure that a blow out does not happen. I often do that. I agree that a full stop of lowered exposure (Auto never implements two stops) seems like it is a bit too much, but then again the loss of the full stop compared to the gain in avoiding blow out is a trade off I will always want to make - because you aren't getting a false trigger.

As the OP indicated, he wants to know how well the system works on Fuji. I'm indicating that it very certainly works better than my experience with Pentax... where lenses (due to reliance on mechanical coupling variances, I suspect), as well as major inconsistencies in implementation from one body model to the next - made the entire exercise a lot of guess work. I haven't had that issue with the X-T20 and X-T2, and I'm pretty sure that the newer models work similarly well. I don't hear complaints about faulty metering, but you do hear many complaints about the histogram accuracy - and whether the warning system (which I find distracting) is triggering after one channel or two channels are blowing out. That's clear guess work going on I don't get when using DR Auto.

Finally, don't overlook the tonal curves implementation that comes along seamlessly in making the raw conversion from DR 200 (I don't use DR 400 so I can't say when it comes to two stops). At least when using Capture One, you always get an excellent starting point that has me double-checking when DR 200 has been implemented because it looks just about as good as regular exposure. When relying on the underexposure solely, you usually have more post processing to be done to get the right look.

By the way, I should mention how often I get into an action situation where the Auto DR does not trigger in one shot, but then a slight shift in my aim or field of view on a zoom causes a bright object, light sky or sun near the edge of the frame to show up and changes in the dynamic range results in the unexpected trigger. I don't have to worry about making exposure comp changes if the priority is to get that special moment. And believe me, you often are making those quick shifts at the time the ideal shot is coming into the frame.