The "Apply Univ. of California Rules" checkbox tells the system to calculate the GPA in accordance with the University of California.

As to how it calculates the GPA, it does not look at test scores, it just does the following:
  • Convert the grades earned in all college-preparatory courses ("a-g" courses) taken in 10th and 11th grades, including summer sessions: A=4, B=3, C=2, D=1. (Pluses and minuses don't count.)
  • Gives an extra point for each honors-level course, up to eight semesters.
  • Honors courses are Advanced Placement courses, Higher Level and designated Standard Level International Baccalaureate courses, transferable community college courses and UC-certified honors courses that appear on your school's course list. A grade of D in an honors course does not earn an extra point.
  • No more than two yearlong UC-approved honors-level courses taken in the 10th grade may be given extra points.
Note: Rules of the California GPA  state  that only 10-11th grade years are used:

Only the grades you earn in "a-g" subjects in the 10th and 11th grades - including summer sessions - are used to calculate your preliminary GPA. Courses you took in ninth grade can be used to meet the Subject Requirement if you earned a grade of C or better, but they will not be used to calculate your GPA.