Unfortunately Apple are quite vague about it:
https://support.apple.com/en-us/HT204516. They do mention running at various different speeds (20 minutes at each speed) if you generally run at different speeds, but aren't clear on how different the speeds need to be to require a separate 20 minute run.
In practice most people don't seem to need calibration and it is only something that I suggest when their pace looks off. But at the other extreme for some people the calibrated distances just don't work, and then I suggest that they use the GPS option for distance and average pace.
Note that current pace is very different and you should only use the GPS option for that if you really have to. Pedometer or Health give much better estimates of current pace for running (although which is the better of the two is under investigation).