@David Davis good question — the short answer is the module stays locked at 2Mbps, there's no automatic adaptive rate stepping happening under the hood. BLE PHY selection (1Mbps, 2Mbps, Coded PHY) is set at connection time and doesn't auto-negotiate down as RSSI degrades the way something like WiFi would. So you're essentially trading raw throughput for link budget yourself if you decide to drop to a more robust PHY.
For your telemetry use case, if you're staying within reasonable range and the link quality is solid, locking to 2Mbps and just monitoring RSSI in firmware is a pretty common approach — you set a threshold and if signal drops below it you can either alert, retry, or switch PHY manually. The module will hold 2Mbps until the link degrades to the point where packet error rate becomes a problem, at which point you'll start seeing retransmits and eventually dropped connections rather than a graceful step-down.
If your deployment environment has variable range or obstacles, worth building some RSSI-aware logic into your firmware so you can decide when to back off to 1Mbps Coded PHY before the link actually falls apart rather than after.
