This thing is driving me crazy. What is supposed to be the correct operation? Here is how mine behaves. I have the AUTO AC option or whatever where you can set the temp.

1. AC on temp at 60. Whether the recirc is on or off it does what it wants. If I have recirc off it stays on for about an hr then switches randomly between outside air and recirc mode, making it hotter in the cabin when outside is on
2. AC on on LOW. Same behavior, I think.
3. AC on and Low/60 degrees, with recirc forced on, it still switches to outside air after a while

What does the recirculate button actually do, if anything? It doesn't seem to obey the buttons command lol

My bmw 3 series has a "preferred outside, preferred inside, forced inside" modes of operation. Per my understanding. Why can't cars just do what you tell them to do? Very irritating.

 

This won't help and not intending to hijack your thread - but I also have the Auto AC in my '04 R53 (pre-facelift) and have kind of a similar issue.
Re-circulation and outside air works and does as it should. However, I constantly get a moderate flow of air coming out of my upper vents regardless if the AC is on or completely off.
Most of the time the air streaming in is warm (engine compartment?) and blows in hotter,harder the faster I drive.. In contrast; If I turn on the AC and set it cooler i.e: 64°, just for a few seconds and turn it off - the air will stream in at the temp I set it to with the AC completely off + recirculation button un-ticked or outside air.Thus vise versa = turning the temp up and then turning the AC off.
Seems as if I may have an air duct flap stuck open(?).
Is this possibly in any way similar to your issue?

I apologies for the interjection. I now return you to your original quandary...

 

You can put in test mode and verify function