Only if they gain possession when the device is running with the drive decrypted and they keep it running the whole time. That is a lot higher bar then being able to turn the machine on at any time and then recover the key. For example if this is a laptop that you are flying with. Without auto-decryption you can simply turn it off and be very secure. With auto-decryption they can turn it on then extract the key from memory (not easy, but definitely possible and with auto-decryption they have as long as they need, including sending the device to whatever forensics lab is best equipped to extract the key).
Yeah, I don’t think there are many benefits when keeping the key on the same drive. Other than a bit of obfuscation. It does still help with erasing, as you can wipe the keyslots (rendering the key useless) but with modern storage media deletion is fairly hard to ensure. But still better than unencrypted.