This is normal operation for this button. AUTO means exactly that. The ACC will automatically control the car's temperature based upon the wheel setting and ambient air temperature. It takes awhile for the AUTO setting to kick in (meaning NO button is depressed on the PBU) and the fan to start but it does. The heating and cooling are iffy at best in my car so I almost always have FULL heat, FULL air, or OFF depending upon the season.

__________________
2009 ML320 Bluetec
1985 300CD
1981 300TD

Past Mercedes
1979 300TD
1982 300TD
2000 E320 4Matic Wagon
1998 E430
1984 300SD
1980 300SD