Game Version: v1.20, but I don't see it bug reported anywhere (according to a forum search).
Every time someone is promoted, they are relieved of command. Automated assignments doesn't appear to be able to handle this either, as they aren't immediately reassigned to their prior posting, even if it wouldn't cause a conflict in the command structure.
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Example:
I have 3 score fighter craft landed at 3 fighter bases on Earth. The bases are commanded by commodores, and therefore the fleet is commanded by a commodore. The admin seat (Earth Defense Force) is thus RADM rank requirement, but commanded by a VADM because she was better. The system admin seat is VADM and commanded by a VADM, and the navy as a whole is ADM, commanded by an ADM.
In such a case, a commodore can sit in any of those fighters and not break up the command chain. They can also sit in any of the bases. Yet, when a CAPT on a fighter was promoted to commodore, they were relieved of command, and the automatic assignments setting did not reassign them.
Similarly, that VADM in charge of Earth Defense Force was only recently promoted to VADM. She was relieved of her RADM minimum seat despite the fact that her superior is of equal rank, and thus would not change the command needs. I had to manually assign her back to her posting.
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In the very least, it should only relieve the command of people who will break the command structure. It should also auto assign people to positions they can actually fulfill without breaking the command structure.
Related, but not precisely the same issue, I am losing LCDRs to retirement at 31 years of age, despite having more than enough positions available for them to be assigned to. Automatic assignments aren't assigning them to vessels.