With the paper source set to printer auto-select (rather than to a specific tray identifier), most (all?) LaserJet printers will select the source tray by trying to satisfy the paper size (e.g. A4 or Letter) and paper type (e.g. Plain or Letterhead) attributes specified in the incoming print job:
Since the multipurpose tray 1 is configured as size=Any, type =Any, the printer will consider this tray first, but only if it is open/loaded.
Failing that, and assuming that the print job requests size=Letter and type=Plain, trays 2 and 3 in your printer are both configured to satisfy this combination of attributes.
if two (or more) of the cassette trays could satisfy the request, paper is always taken from the highest-numbered tray (tray 3 in your case) first. I suspect that the reasoning behind this is that on some printers the highest numbered tray is a larger high-capacity tray.