What determines how one should vocalise an abbreviation when reading aloud?

When, in reading something aloud, one encounters an abbreviation, there are three possible approaches to vocalising it.

(1) Sometimes one will vocalise the abbreviation letter-by-letter. This is almost always done with certain abbreviations, such as A.M., PhD, and RSVP. Somebody who read them aloud as ‘ante meridiem’, ‘philosophiae doctor’, and ‘répondez s’il vous plaît’ would likely receive very puzzled looks.

(2) At other times, however, one is expected to utter the whole word or phrase that is abbreviated by the abbreviation. Kg is thus read aloud as ‘kilogram(me)’, cm as ‘centimetre’, and Mr as ‘mister’.

(3) In yet other cases, one ‘reads’ an abbreviation by uttering a word or a phrase that is morphologically unrelated to it, but has the same meaning and, in the context, sounds more natural than what is abbreviated by the abbreviation. For example mmHg is normally ‘read’ as ‘millimetres of mercury’, and lb as ‘pound’.

The same abbreviation may be vocalised differently by different people and/or in different contexts. Some people pronounce i.e. letter-by-letter, but there are those who prefer to say ‘that is’ instead, and a small minority who read it as ‘id est’. Some English speakers ‘read’ °C as ‘degrees centigrade’, but others read it as ‘degrees Celsius’.

A number of questions have been asked on this site about how one should read this or that particular abbreviation. This question is, however, a general one: do English speakers’ decisions to follow (1), (2), or (3) form some kind of a pattern? Is there some rule, even if only an imprecise one, that determines which of these three approaches will seem more natural in a particular case? Or is it that there is no rhyme or reason to it, and one has to figure out separately for each case what the best way of vocalising it is?

(It should be noted that the question is only about reading aloud, not about dictating. Also, the question does not concern acronyms, which are of course specifically designed to be read as words.)