Sorry that you are having some issues with the game there mate. Fortunately I have not come across any of the challenges you have mentioned myself and I am an avid Mazebert grinder.
It's possible. I haven't actively sought to select auto-transmute, but I may have fat thumbed cards I would not want to auto-transmute. I'll play another round starting tonight to see if that's the case.
Does auto-transmute show the progress toward the next item or card level in the little circles in the upper left, or does that all happen invisibly?
If you transmute a stack of cards it automatically sets auto transmute for this card. This was changed in this version.
Sometimes the transmute is added after the next wave ended.
The card dissapears and nothing happens.
After the Wave the card or Ring Progress is added.
the ringprogress isn't added visualy, while you in that screen. but if you get a full ring, you get the tower/potion/gear at this moment. (cant see it, in case the outcome is in autotransmutelist too.)
maybe thats the source of the confusion.
get out to mainscreen and back in to "refresh".
Probably you didn't have the quest when you started the game. You can check in-game what quests can be completed in that game by pressing the stats button and sliding to the last card.