I am having the same issue as well, but with the "Return to Merchant" button that is shown after a successful transaction. I am assuming the auto-return uses the same logic just automatically redirecting the user. I have been experiencing this in our production environment since August 9. I have contact PayPal support and they acknowledged seeing the same issue but have since not responded, and we're continuing to see the same problem today.
Whenever we supply a "cancel_return" parameter, it is used as the endpoint of that button, so our users are incorrectly seeing a failure page after a successful payment if they click to go back to the main site.
I was experimenting earlier, and if I don't send a "cancel_return" parameter, then that final "Return to Merchant" button doesn't get shown. This seems to be further proof that the URL parameters are getting mixed up.
