You control what mode the AP is in before engagement.
Without the AP74, you use the menu keys and can go into mode to choose heading, track, or nav before you turn it on. It remembers the last used mode so if you toggle it on and off it doesn't reset.
With the AP74, you use the buttons on the module to choose what is armed, and then hit the AP button to engage or disengage it all. If you don't pre-choose a mode and just hit AP, heading hold comes on synced to your current heading.
The lateral and pitch modes can be engaged and disengaged completely independent of one another.