There is no theory there but facts: in AUTO, it adjusts the scale depending on your VRAM amount. That’s all there is. And if you’re wondering whether I’m right or not about this, see a few post above whom I got the info from. Now it is possible the next OXR preview changes this with more complex heuristics, but it is how it is working now.
The real test would be taking note of the post processing resolution in FS2020 fps window when in AUTO, then manually dial the same scale (not AUTO) and compare… With my 2070S 8GB IIRC it is about 63% scaling in AUTO.