The micro-newton-level cusped field Hall thruster is an electric propulsion device that employs microwave-assisted ionization control. It serves as an actuator in drag-free control systems, ensuring control accuracy and stability by providing continuously adjustable thrust over a wide range. However, a mode transition occurring in the regulation process can lead to a sudden change in anode current, thereby degrading control precision and stability. Therefore, it is necessary to investigate the underlying patterns of mode transition. This study examines the variations in internal plasma parameters and discharge characteristics of the thruster before and after microwave mode transition, primarily through probe diagnostics. Experimental results indicate that prior to mode transition, the plasma luminous region is primarily concentrated within the electron cyclotron resonance (ECR) area, approximately 1–3 mm upstream of the anode. After the transition, the luminous region moves further upstream, and the plasma density near the anode exceeds the cutoff density, dropping sharply along the axial direction. The fundamental cause of the change in electron heating mechanism is the alteration in the propagation characteristics of fundamental waves due to this plasma density variation. When the plasma density rises to the cutoff density, the R-wave and O-wave, which drive ionization, are rapidly attenuated or reflected. At this point, the R-wave cannot reach the resonance layer, causing the dominant ECR ionization to become ineffective. The ionization mechanism shifts from being dominated by the R-wave and O-wave to being dominated primarily by the O-wave. Consequently, the electron heating mechanism shifts from volume heating to surface wave heating. This research will provide a basis for subsequently optimizing microwave transmission in the thruster and for reducing the threshold at which mode transition occurs.