OD is not a gear. It is a virtual gear as u say. When u off OD(when the light is on), u feel power bcoz u are revving. the max gear is the same as engine speed which is the 3rd gear. With OD on u put less stress to ur engine. if people say that turning off the OD 1st if not enough only shift to 2 to reduce wear or any damage. this is not true. it is an auto car mind you. all those things is just an assist for u in fuel saving and reduction of tear and wear. if u try pedal to the floor then u will know. another thing is, OD on give u lower RPM at the same speed.
hmm...something wrong with the sales agent language i think. it already say OD OFF. i means it is off. it say it is off and he say it is on. wat an agent.

it shouldnt be spoiling anything. unless u are at your top speed with the OD on and u turn it off. u will definitely going into red zone rpm and overheat something there. for an auto the dragging is normal. at least it will safe u some fuel. when u downshift to gain power, u lost fuel more.

switching it off is the one that will eat up ur fuel. please dont contaminated and confused other. it doesnt matter whether when u get the car it is on or off. all OD is set to on by default. Tat is why there is only OD OFF light when u off ur OD to remind u tat u are wasting fuel and revving high. There is OD ON light to tell u u turn on ur OD.