Autoequip will try to find an item of the same type that was destroyed and if it can't find it, it will look for something it can replace with starting from the top left going to the right. You can place your weapons in order if you wish specific ones to be replaced first, while the ones you want to save up (tools for example) put at the end of inventory.
There is a message in the log about item being replaced and a sound indicating the autoequip triggered.