I posted this somewhere else, but it may help here as well:
This is with manual TDC, but map updates "on", which I find is the best way to learn since you can practice manual targeting and doublecheck against the map readings to figure out what you are doing wrong.
The solution (i.e. range, AOB, speed) was plugged in exactly from the data on the map. I aimed at the bow and midships and the torpedoes hit where I was aiming. The gyro angle takes into account not only the aim point, but the fact that the TGT is moving right to left at 10 knots.
When you have a perfect solution, the torpedo will go exactly where you aim it.
I have not tried AUTO TDC, so I do not know what the issue is or why it does not work the same way.