Yeah, with tactics 0 its useless. With higher tactics, it's actually pretty good, though.
For example - party of ~40 high-level troops vs a ~35 caravan = 1 loss with tactics 9 (7 on character + 2 bonus). Clearly you still lose guys you wouldn't if you participated, but, on the other hand, you are not participating
I gotta believe that with tactics 10 (+4), it gets really good. It's an underrated skill, too - battle advantage seems to scale based on the number of guys, so reducing it by a couple of points is a huge deal. An example - with this same guy with tactics 7, in a battle of 40 vs 400, I get outnumbered at worst 2-1 on the battlefield, which is huge, since it makes that battle easy.
Another example - try looting a village with ~5 guys. Without tactics, you're likely to have 1 guy to help. With middling tactics, you may get all 5.
Oh, one more note on autocombat - you seem to get a LOT more prisoners that way. In a test vs 25 sea raiders, I got 7 prisoners... vs 45 I got 20 prisoners, though I did actually lose ~10 guys (out of the same 40).