Default time value is absurd

That would be 10,000 milliseconds.
The default period value used is '10'
The javascript setimeout in the module code multiplies the period up from seconds into milliseconds as required by the func.

Perhaps you've got something else wrong if you are not seeing the updates happen.

Curious.
The code that generates that page Is this:

/**
 * Menu callback; return the autosave module settings form.
 */
function autosave_admin_settings() {
  if (!file_exists(AUTOSAVE_PATH .'/jquery.field.js')) {
    drupal_set_message(t('Unable to find the jQuery Field Plugin in !path. Please <a href="http://plugins.jquery.com/files/jquery.field.js_4.txt">download jquery.field.js</a> and place it into !path.', array('!path' => $path)), 'error');
  }

  $form['autosave_period'] = array(
    '#type' => 'textfield',
    '#title' => t('Autosave after this amount seconds has passed'),
    '#default_value' => variable_get('autosave_period', 10),
  );
  return system_settings_form($form);
}

*shrug*

Yup, as far as i can see the code default for this is 10 sec.

I think you missed my/our points. The UI isnt' in ms it is in seconds; the code says 10 (seconds) the module defaults to 10 seconds. No idea you have managed to set yours to 10,000 seconds without knowing it.

I just (now) added the module to both a new Dr5 and new Dr6 site and sure enough the default comes up as 10 (seconds) - as the code would suggest it would.

Perhaps you are using a settings.php file of unknown origin?? I know i occasionally set the autosave time in my settings.php $conf to "disable" the module (in a multi developer environment where we have multiple developers with their own test sites - run as multisites - if this doesnt make sense; likely not your issue.).

Unable to replicate on a clean 6--1-1 install.
You can get that result by entering that number in the form yourself, but the default is - as clearly shown in the code - "10".
'#default_value' => variable_get('autosave_period', 10),
And a picture means it must be true: