No you don’t have auto shutdown. When the noises started the damage was significant. When the smoke comes out of the engine compartment the motor is severely overheated due to all the friction of raw metal grinding on raw metal. The bearings will be burned out, the pistons and rings have scored the cylinders and the head is likely warped from the heat. The motor can run like this when you put oil in it, but it won’t run well, it won’t have much power, and it won’t last long.
The only way the motor could survive is to turn it off as soon as the “oil” light came on. Once the noise started it is all downhill from there.