backup_auto_storage has one of three values:When #3 is selected, the specified directory is populated with automatically generated backups as intended, but no automatically generated backup files are listed in the 'Course backup area' section of the 'Restore' page for each course.
Due to the opaque nature of the filesystem in Moodle 2.X I can't tell whether backup files in course backup fileareas do in fact exist but are not being listed or whether no such backup files exist.
Update: I've poked around in the database tables pertaining to backups and the only table featuring a path column is <prefix>_backup_files, however this table is empty. Table <prefix>_backup_files_template features a filearea column but this table is also empty. So, without any identifiable fileareas or filesystem paths pertaining to backups I think it's probably safe to say that no backup files exist anywhere else in the filesystem other than under the specified directory despite the value of backup_auto_storage being #3.