Photoshop Elements stretched the contrast range of the photograph to fill up the available range.
In the first histogram below, of the snow-covered pool, note how there are no pixels on the right side of the histogram.
That part of the contrast range isn't being used.
It's going to waste.
After using the Auto button, Photoshop Elements stretched the contrast range to use the entire contrast range.
Note how there's pixels across the entire histogram.
Original
Auto Levels
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