See Options - LibreOffice Help for a description of what Autocorrect (or rather Autoformat when it comes to replacing styles) actually does. I’m not a developer, so I don’t know the reasons for this behavior, but it makes sense to me. Basically, the procedure assumes that you know what you’re doing. You enter chapter headings as a sentence without a full stop, and subheadings as sentences without a full stop but with one or more tabs stops at the start, and the rest is plain text or indented text. You can also input numbered or hyphened lists. Then when you do Autoformat - Apply, it will replace the Default style by the styles that are indicated by your input. Now, if you took the trouble to make and apply some custom styles, you obviously don’t want them to be replaced by Text body or anything else. When you untick that option, you basically tell Libre that you take full responsibility for that part of the document.
It’s a bit different when you use autocorrect as you type, because the autocorrect will be in your face, you see what’s happening, and you can revert what you don’t want (Ctrl+Z). But automatic formatting of an entire document is completely different - you should really proofread it afterwards to check that everything was changed according to what you want.
See Tutorial List of inbuilt styles for more help on using the inbuilt styles.