Because you can make your Auto-Zoom height taller OR shorter then the rest of the tracks. Shorter seems a bit weird, but it's possible. Think of it as an independent setting for "height" that only the focused track inherits. The unfocused tracks inherit the alternate height (which can also be adjusted).
Try adjusting the auto-zoomed track height as well as the other track heights while the setting is enabled.
FWIW, I did the same exact thing my first time playing the feature