Automatic Proxy Configuration works exactly as in Network Preferences. The URL is checked for updates every 5 minutes or so. JavaScript version is the latest supported by your macOS version.
SOCKS proxies are not yet supported, so returning "SOCKS" entries from PAC script will not work. The support will come in the future.
Preproxy can not read arbitrary file:/// URLs because it does not have permission to read files on your system. Apple's mechanism for asking user to grant such permission is currently broken. The only location accessible to Preproxy is its application group container directory (~/Library/Group Containers/4EVWBBD4BP.io.github.hamstergene.preproxy), so if you want to read PAC script from a local file it has to be placed under that folder. You can drag and drop a file from Finder onto Preproxy window to avoid manually typing the rather long file:/// URL.