From what I observed, when you set your desktop icons to sort to something other than "none". The "Auto Arrange" will always activate. This make sense so that when you have your icons sorted it will always be arrange properly. If you wish that "auto arrange" stay off you will need to make it sort to none and do the sort manually. I can see similar behavior when Fences is not installed in the system.
Thank you,
Basj,
Stardock Community Assistant