It is definitely doing some learning of your usual responses behind the scenes.
My normal response with any of the “target” workouts (the ones on the hard days) has been to rank things 3-Hard based on Chad’s table, which I don’t think has ever led to adaptations. Then when I rank things 2 or 4 I have been getting adaptations harder or easier.
Other posters have reported that AT is giving them adaptations when they rank 3, which I haven’t seen so far (although I can see it might happen if I ranked a workout significantly below my PL as Hard), but they seem to be using the lower rankings a lot more than I do. AT seems to have learnt that and makes the adjustments based on your own response history rather than having a generic rule. I get the impression (maybe unjustified) that some users are ranking lower deliberately to try and get faster progress (I guess this is human nature…) but AT seems to have some limiters built in around this, otherwise ultracompetitive types would be ranking everything 1 and blowing themselves out within 3 weeks 
So I would suggest the key is to be consistent with your approach to rankings.
Also that workout looks miserable!