I think we may be running into a distinction Apple makes between the screen saver and auto lock settings. "Auto lock" is set for inactivity vs triggered by screensaver activation. Here's some examples:
Auto lock 5 minutes, screensaver 5 minutes: If there is no user activity for 5 minutes the screensaver activates. Then after an additional 5 minutes a password is required to get past the screensaver.
Auto lock immediately, screensaver 5 minutes: If there is no user activity for 5 minutes the screensaver activates. If a user moves the cursor after the screensaver appears they are immediately prompted for a password.