So i would guess that most people don’t use auto-update anywhere they can since if you search the forum for “auto-update” most of the posts are people asking how to disable auto-update on the few things that do that (like supervisor).
Also from personal experience on this, I would recommend turning it off. It is not safe to assume addons have comprehensive testing in all situations they may be installed. I just had one break the other day because the latest version didn’t work on arm systems like rpi since the author only had a x86-64 system for testing.
There is also no guarantee updates are backwards compatible. A lot of authors will try and keep breaking changes to a minimum and limit those to major versions. But that’s convention, nothing enforces or requires that. And auto update will auto install new major versions anyway. So basically your setup could break at any time.
Also this is the biggest one - There is no way to rollback an add-on and install a prior version. The only way to do so is to restore that addon from a backup. If you auto update you might end up in a broken state with an old snapshot and be pretty hosed. With manual updates you control the schedule so you can ensure you always have a fresh backup.
All this being said, the feature should work for those willing to risk it. Seems like maybe a supervisor issue? I’d recommend opening an issue on the supervisor repo