The transfer graph shows the total transfer in bytes of all connections each second. There are also several radio buttons allowing the user to change the magnitude of the graph for various levels of transfer.
The reason the graph does not automatically re-calibrate for magnitude is that some sites can have large deltas in traffic. This would result in the graph constantly changing magnitude as traffic jumped from KB to MB and back frequently. This also allows the user to watch just the lowest magnitude or just the highest magnitude moments during transfer.
The graph also has a fine granularity control which allows you to divide the values plotted by orders of magnitude. This is useful when traffic is maxing out the KB setting, but does not register fine enough deltas to be seen under the MB setting.