Push the button on the head rest and fold it forward .So this is an old post but an update for anyone interested. In my Badland with the towing package/full size spare tire combo the rear floor is higher but the seats still don’t fold flat.
The two different heights for the floor are for with and without the full size spare tire. I could not use the lower position unless I removed the spare tire.
Even with weight on them my seats would not fold flat, the headrest has no effect either way unless the front seat are too far back and the head rest hits them when folding down.
There is barely 5 feet to lie down/sleep, just about six diagonally but it would not be comfortable. However two or 3 inches of foam cushion in the trunk and a couple of inches additional inches over the entire backseats folded down and the trunk area would probably make something usable in a pinch. I think I would rather just sleep in the passenger seat Like a recliner.
Here are some photos
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