Deadzones are basically a zone in your joystick axes that the sim “ignores”. This is important because even a single micrometre of movement in your joystick, the sim will accept it as a valid input. This makes it almost impossible that your joystick is exactly centered because you could have vibration, or even your hand slightly pulling/pushing without you realising that’s it’s not exactly centered.
It’s these micro movements that can cause the autopilot to be overridden by these inputs. So by adding deadzone, you are giving the sim a certain zone within your joystick axis that the sim must ignore. So only when you’re actually moving the joystick past a certain threshold that the sim start to receive the input. That way, any micro movements within this deadzone will be ignored and your autopilot can work the way it should.
I put mine to at least 5% on all my X, Y, and Z axis in my joystick.