I found that that the documentation in the wiki on using Standard Ruby in Sublime Text with Sublime LSP as Ruby LSP Add-on, as recommended, was not working for me.
The following configuration finally enabled auto formatting on save. Emphasis on the properties in initializationOptions.
{
"clients": {
"ruby-lsp": {
"enabled": true,
"command": [
"ruby-lsp"
],
"selector": "source.ruby",
"initializationOptions": {
"formatter": "standard",
"linters": [
"standard"
]
}
}
}
}