When using auto brightness, the brightness bar setting (1/2, 3/4 etc) represents the minimum brightness the phone will go to. So if you go into a dark room and have your brightness levels set high you won't see it drop past your minimum level, and you may not notice much dimming.
In fact if you set it too high, you may not even see it light up in bright rooms as it may already be at or past the max level for that environment.