I'd try all three and see which one sounds best. Front Ref adjusts the sound of the rest of your speakers to match that of the front left/right, for a same 'speakers all round effect', while Full Flat aims to create a flat frequency response from all the speakers. That should be the ideal, in that all you hear is what's on the disc, but I've found this setting to be a bit clinical and - well - flat-sounding.
The Engineer mode adjusts the sound of your system to match that the Sony engineers hear in their listening room back in Japan. And having heard the room in which the company's AV guru and 'Chief Distinguished Engineer', Takashi Kanai, spends most of his working life, and on which this mode is based, I can tell you it sounds very good indeed.
Just to give you some idea how seriously Kanai takes his sound, when Sony moved the AV department from an old low-rise building to many floors up a swish new tower block, Kanai's seemingly chaotic room was documented, and then reconstructed perfectly in the new location. The first time I visited the 'new' room, it was like the old one had been sawn out of its old location and dropped in place in the new one. Weird...
Even more serious, Kanai doesn't travel too much if it involves flying - he's convinced all those changes of pressure affect his hearing.
And what does this guy do in his spare time? He hand-makes Japanese soba noodles...