That's what we'd hope, but I'm not sure how we could verify whether it's working properly or not. Judging from the LCD display, the D5200 S-mode firmware is attempting to set exposure via a combination of aperture and ISO adjustments. The lens, however, is transmitting a constant amount of light due to its mechanically fixed aperture. There are two possibilities here:This is exactly the behaviour I see with the D7000, only it is reliable – Live-view S mode pegs shutter speed at the selected value, and auto ISO floats the sensitivity to expose correctly according to the matrix metering. It's usually very good. The camera may report that it's changing aperture, but since it has no mechanism for doing so in live view it finds a metered exposure using only auto ISO. That is: if you ignore the aperture indication the camera behaves as expected and desired.
1. The camera's futile attempts to adjust the lens aperture produce an improperly exposed ISO setting. Or...
2. The lens' constant light transmission produces the correct ISO regardless of the ineffective aperture adjustments.
Perhaps a comparison of identical auto-ISO takes shot with AE-Locked aperture, shutter speed, and ISO in both M and S modes?