Right now, when you select group by Start Date: Automatic, we display the date and time with a precision up to the second. It is easy for the other group by start date settings to determine the precision of the label (e.g. group by year should only display year, group by month should display year and month). For automatic grouping we can't make such assumptions.
Still, we should make a guess based on the total time span for the report. If the timespan is multiple years, maybe display only months and years. If the timespan is only a couple days, maybe hours is the granularity to go with.