If you automate something, you actually tell the AI "handle this as if it was another AI faction", meaning that it makes the decission in the turn together with the other factions ("Thinking" or so).

So you will never see buildings that last only 1 turn (tower etc), because the AI orders the tower, and at once resolves the order.

But as to upgrade automatically, it should not do that. If it does, there may be (I doubt it though) some AI-cheating going on here ...

Please check and give details.