automatic v.s manual levels

Why do most people nto like using automatic leveling or am i mistaken. When using my XL2 it seems that if the source is loud enough there is no point to use manual since you run the risk of distortion.
 
AGC or automatic gain control has a big problem. A sudden loud sound will force the recording level way down and it then takes several seconds to recover. Similarly when things are quiet, the gain gets cranked up till the background noise in the room is too loud.

Visually it's kinda like the way automatic exposure works making the darks too light, etc.
 
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