Display is fading in and out

I suspect you're seeing this feature:

There are ambient light sensors which allow it to automatically adjust screen brightness. Sounds like that's what you are seeing. If you place both hands over right and left speaker grills, it should dim.

There's an option in the System Preferences -> Displays to enable or disable this feature.

For me, it tracks pretty close to what I would like, but sometimes I bump it up or down a bit. Even in auto, you can adjust it. It'll hold the setting until the next change in ambient lighting.

The other thing it might be is the "dim before sleep" option. See the System Preferences -> Energy Saver -> Options "Automatically reduce the brightness of the display before display sleep"

Glad that answered your question.

btw: if you haven't discovered it yet, the keyboard illuminating is also controlled by the ambient light sensors. Controls for it are in System Preferences -> Keyboard & Mouse -> Keyboard

I used to love this when I first got my PB 15. It always worked perfectly.

Then the rot set in with the 10.3.8 update. It became over sensitive. Just typing would cause it to dim whenever I reached for the shift or tab key. Sometimes it would flicker indecisively between two settings.

Now I have it off, and set the brightness manually. I'd love to have auto dim back - is there any way I can make it less sensitive to momentary shifts in brightness?

I suspect before, it reacted in a dignified way to a rolling average of the ambient light from the last two seconds or so. With the upgrade, it seems it shifted to a very annoying and distracting instant response to any shadow.