Indeed it's much more efficient for the AC to cool pre-conditioned (cooled or heated) air, so in auto recirculation mode, it will normally switch to recirculate. What's missing in this setup is a CO2 sensor on the inside air flow to draw in fresh air if it CO2 levels go high - although I doubt our cars are air tight enough for this to be an issue. It does have a humidity sensor though in the mixer stage, and when that gets too high, it'll use the heater/ac combo to dry the air. I think it emulates a split mode where it draws some fresh air from the outside by periodically switching to outside air, similar to how aircraft are doing it: Bleed air from the engines replaces about 30% of the air in circulation in the cabin. There's no recirculate only mode in aircraft, hence the lovely smell of jet fuel exhaust when engines are started on the ground with the tail facing into the wind (or when sitting directly downwind of another aircraft).