I always thought that function was on the phone side of things (like silent/vibrate settings). The only other setting in there talks about silencing calls while the phone is unlocked (or not). I've had strangeness where the auto function and the manual function seemed to interfere with each other if you crossed the auto threshold resulting in calls that I wasn't expecting to make it through, although on checking it was actually turned off for no good reason.
I know I have had weirdness in the past with the phone NOT ringing at all (which was solved by resetting the carrier settings and making it redownload everything. Optus had stepped me through some code entered into the phone dialler like 23# and then hit call (NOTE THE REAL CODE) which had the phone acknowledge something the ask to download carrier settings. Not sure what this was but I can't seem to find it in Google right now.
There is also a reset network setting under: General -> Reset -> Reset Network Settings (although I've never tried this one myself).
I've also had issues where the audio just stopped working completely (on two very different devices and different accounts within the space of 24 hours) which were resolved with a simple reboot.