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I have the same truck (except for OnStar). I wondered the same thing because I am around 20% life.
I doubt it can monitor oil quality, but it is probably more than just distance travelled. Probably more like engine revs turned, or some combination of factors collected by the engine computer. My older Duramax had different oil change schedules for heavy and light use (e.g. towing was heavy duty use). I would think that there is something built in to account for this. (maybe related to use of the tow/haul mode).
In short, I don't know either, but since it is GM who have to fix the engine if it goes wrong, I'm going to trust it until proven otherwise. I don't think I will use synthetic oil in the engine. I probably will in the Allison.
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