This will get a little technical, but since you ask
It depends on your output impedance, which I presume is unknown. A device that re-amplifies and gives the output signal a fixed impedance of 75-ohm makes it simpler (like the HAS, or the tri-sync helper/Jammafier).
The 75-ohm setting is for devices with an output impedance of 75-ohm, and this terminates the signal with 75-ohm. If you measure the signal unterminated at 1.4, the termination in the A1 will bring it down to 0.7V.
The arcade setting has a termination of 1K. Arcade boards have wildly different impedances and there is no standard - but arcade monitors often terminate the signal with 1K. The arcade setting also has a voltage divider in the mix, to bring the levels down to something that will not overload the ADC chip.
If you feed the scaler a 1.4V signal with high impedance - there is no right setting, as the 75-ohm termination will make it dim, and the arcade setting expects a higher voltage.
There is also a component of the A1 that comes into play, which is the analog gain stage. This accepts 0.5 to 1.0V, and will adjust it to make full use of the 10bit ADC. This is adjusted every time sync stabilizes, if something clips, and a few seconds after sync stabilizes. You can also trigger a manual re-adjustment by pressing the middle button on the A1.
In practice, this works pretty well for 75-ohm sources, and raw jamma sources.