The soft kill may be activated after receiving warning from a Laser Warning System of the armored vehicle. I don't think it would be effective against dumb rounds or fiber optic-guided ATGMs and some of the newer generation ATGMs. We could be talking about algorithm based on some kind of sensor fusion that allow the APS to take the decision depending on the mode of operation choosed.
That's one possibility, but most 3rd gen ATGMs simply doesn't need LRF or are F&F (so not laser beam-riding). It will only work against some Russian and Chinese designs that use laser beam-riding, their gun-launched missiles and US Hellfire. US will soon transition to JAGM with multi-mode seeker so ATGMs requiring laser for guidance is only decreasing at this rate.
Despite it's issues, distance based discretion still is one of the most credible way of discriminating ATGMs from AT rockets, simple due to maximum effective range of AT rockets, which usually aren't any longer than 200m and minimum launch distance of missiles.
Though I agree that some sort of machine-learnt sensor fusion algorithm could help the target recognition and discrimination problem. Also, as you've said, they could employ different operating modes that could be chosen manually based on operational environment (hard-kill only in urban environments or soft-kill priority in countryside.
Not all of them have newer ATGMs. It’s just an addition to other protection systems.
Maybe we can combine it with a laser system.
Still mostly useless, since it basically only works against SACLOS missiles using IR flares. It made sense for the Soviets which developed Shtora at the time, since their biggest adversaries used TOW, HOT and MILAN, which were all optically tracked SACLOS. Now they are decreasing in numbers. It might be helpful in Syria, where there are still a lot of SACLOS missiles in use, but why not just use hard-kill at this point. Even Russians are ditching Shtora.