I don't recall seeing that precise phrase in the owner's manual, but I'm sure it doesn't work that way. Auto mode doesn't force the system into recirculate mode permanently, but at start-up on a hot day, it *may* choose to use recirculate at first to get a better cooling rate. And the limitation on fan speed is true. Auto mode is supposed to be unobtrusive and work so the occupants don't know it's doing its job, like a good butler.
As you found out, you can force the fan to a higher speed manually, and override the recirculate choice of the auto control module. It would probably stay in recirculate mode longer when in Auto, if the ambient was wicked hot and the system noticed the interior was not cooling off fast enough to satisfy its programming.
