That's a five-star question! :)
The auto-match feature is separate from the duplicate searching criteria in that the constituent must match all the criteria specified in the auto-pick setting (in this case, first and last name and email) exactly for it to be considered an exact match. Sorry, we're rather err on the side of caution on that one rather than have "false positives" in the matching!
I guess I need to make yours a six-star question! I was just gearing up to show you how it works here and was creating screenshots and photographs with circles and arrows and a paragraph on the back of each one of them explaining what each one was (thank you Arlo Guthrie, http://is.gd/d2wyU) when I ran smack into the same issue you are having. I'll bet if you look at one of the records that wasn't working for you will find that they have the same email address on more than one of their addresses (or two of the same email address on a single address record with different phone types). In that particular case IOM incorrectly thinks that there might be multiple matches and therefore shows the duplicate searching screen. Thanks for pointing out this issue to us, we have fixed it here and it will be in our next release.