It's become kind of running joke here on Mastodon. I think it got started because some people didn't like the idea of CWs or couldn’t discern when it was appropriate to use them, so they just started CW'ing every toot so most people would eventual enable the auto-open feature you mentioned, thus defeating whole scheme altogether.
Yeah, it's too bad. Although it's not easy figuring out what will be difficult for poeple to see. I recently posted a video of a woman with anorexia who was extremely emaciated and I CW'ed that (although in retrospect, I don't think I worded the warning correctly.)
I've found it useful for spoilers and extremely long toots (so people don't have to scroll through a super-long toot).
For textual content, I think it helps to also include some warning at the top of the toot, under the CW, just for folks who have the auto-open feature enabled.
@Pat That's a shame. I can see CWs being useful for people who have trauma etc. But they're only useful if done properly.