Refresh Menu Not Functioning

But I don't see why Refresh exists if it doesn't operate ... let's see, couldn't a click on Refresh force an Auto-Arrange? Maybe not, we might be wanting to refresh the list arranged another way.

Refresh just updates the shortcuts/files list. Usually you don't need to use Refresh. TLB checks folder for new items on every menu open. Without auto-arrange all new items added to the bottom.

Is there a way to set a default arrange to Auto under TLB settings?

TLB Settings don't have this option. You can customize menus via "Customize menu" or "Customize sub-menus".