Auto Feedback Feature

Nothing huh? Does this mean that what I am asking is not important or no one knows?

I agree with you 100%.
The buyer does his job by paying in a timely manner, thus deserves immediate feedback.
Once I deliver the product safely, I will then expect feedback.

As a buyer, I NEVER give feedback unless a seller does so first, I suppose I lose out on 75% of all feedback that way.

With eBay's old system of feedback, sellers getting their positive feedback first used to be a sort of blackmail.

Why on earth would Auctiva have it set up this way?

On the other hand, having auto feedback activated gives the buyer some incentive to leave feedback - if they don't leave, they don't get. When we used Auction Watch (now Vendio) we used to give feedback upon payment receipt - as a result we've given out 4000+ more feedbacks than we have received as many buyers did not follow up.