I wouldn't be surprised if it's... looking at the raw attack/defense score on the gear and weighting that either equal to or more heavily than the actual attributes
It doesn't look at the defense scores, or tanks wouldn't have such wonky equip problems. I'm pretty sure it's going by item level, to end up doing that.
auto equip is looking at ilvl, yeah, it doesn't evaluate the specific stats. It has no way to know what's "best" for you without an intense algorithm at work there
so they'd have to either rework all the gear from that section or rework the algorithm, and i doubt either one of those are anywhere on the devs priorities
I've had so many interactions where I notice the tank is really squishy, I check their gear, see they're wearing caster stuff, try to explain to them about auto-equip and armor and whatever...