Auto battle has nothing to do with it. You don't control Joe's actions.
And yes, he does use time wizard in the most unopportune times. Like when you want the enemy to attack cause you got mirror wall or super headrush lying in wait
I guess that this is what they decided to do in order to classify it as the Hard difficulty level. (Although I get the feeling that Kaiba won't be like this, and he's on Master.) It's ironic that the difficulties seem to stem more from the tag partners and not the opponents.