subscription.module, line 506, the line is

isset($edit->subscriptions_auto) ? $edit->subscriptions_auto : $user->subscriptions_auto,

whereas it should be

isset($edit->subscription_auto) ? $edit->subscription_auto : 1,

Please note that the main problem is that the object field is wrong named. 'subscriptions_auto', whereas the form value and stored value is named 'subscription_auto'.