How is the EtherType value used to distinguish between payload type and frame length?

EtherTypes are always used to indicate payload type, regardless of the value.

EtherTypes are values of $00600$ or greater to indicate protocol type; values less than this indicate payload

length.

EtherTypes values less than $0$x$0600$ indicate protocol type; values greater than this indicate payload length.

EtherTypes are always used to indicate frame length, regardless of the value.