Don't use Auto. It seems to AUTOmatically corrupt your images.
did somemore testing and i think you will be correct.
Why is this?...is it because Auto is "too broad a brush" or my computer doesn't have enough power (12 gigs ram??)
or is it a software weakness. is this usually the same for other, similar, effects??
All the auto effects suffer the same limitations. I guess it is a weakness in the algorithms used.
As Harm says, Auto anything is usually less than useful. If the lighting does not change, and the colors do not change, then it might work for that Clip. Any change, and you will likely get "strobing," or "pulsing." Most of the Effects, that are Auto, have a manual equivalent, or have the ability to turn Auto OFF, like Highlight & Shadow Effect.