AUTO will to some degree try to partner the incoming source with what it assumes is the most appropriate mode, but this will not negate the AV receiver from selecting upmixing modes to use on content that isn't either Atmos or DTS:X in nature. It basically makes the AV receiver apply proprietary Dolby Surround Upmixing to Dolby encoded sources while using Neural:X upmixing in association with DTS sources that aren't DTS:X in nature.
AUTO cannot read minds and simpy follows the guidelines Denon layed down for it to abide by.
AUTO
In this mode, the type of digital signal input, such as Dolby Digital, Dolby TrueHD, Dolby Digital Plus, Dolby Digital EX, Dolby Atmos, DTS, DTS-HD, DTS:X, DTS-ES, PCM (multi-channel) is detected, and the playback mode switches automatically to the corresponding mode.
If the input signal is analog or PCM (2-channel), stereo playback is used. For Dolby Digital or DTS, the music is played back according to the respective channel number.