There is no "auto outbid", it is part of the syntax of the /bid command. The command should be entered as follows: /bid <bid amount> <maximum bid> (Where bid amount is your starting bid and maximum bid is the highest you are willing to pay for the item) Doing so will increase your bid by the smallest increment possible if you are outbid, until it reaches the maximum value you entered, at which point it will cease to increase your bid.
That is not sincerely how, if you do get auto outbid then that mean you have to bid more money then what you just put. I know that it's not called auto outbid.
I fear that you have misunderstood both the question and explanation. To further the explanation, the bid command can take 0, 1, or 2 arguments. When used as simply "/bid" it will bid one increase higher than the current listed value. When used as "/bid <amount>" it will increase your current bid to the entered amount. When used as "/bid <amount> <maximum>" it will increase your bid to the entered amount and automatically increase your bid, if someone else bids, until either the auction ends or your maximum bid is reached. It will never bid more than your entered maximum. If you place a bid that is lower than someone else's maximum bid that they entered then you will be "automatically outbid". If you use the maximum bid syntax and someone else had placed a maximum bid that was higher than the max you entered then you will also be "automatically outbid". This results in the myth of "/autobid" (or similar). If you are outbid, automatically or not, you will need to bid higher if you desire the item. Though, honestly, I recommend using the "/bid <amount> <maximum>" syntax as it both makes life easier and helps eliminate the mistake of accidentally bidding too much.