I also had this problem and for me it was due to misaligned parts. Particularly my battery connector bracket needed to be flipped 180 degrees. One side of the part was slightly different than the other side and this slight difference was enough to cause the entire part to seat slightly higher than it should in the assembly. It helps to get sideways and look along the edge of the phone (your eyes should be almost as table-top level) and look to see if anything is sticking up above everything else.
I also had this problem (along with my phone screen not going black during a phone call when the phone was up to my ear) -- I ended up reinstalling the original camera and sensor from my Apple screen onto the replacement screen, but the problem kept happening. When I opened the screen back up and looked at the connection where the ribbon from the sensor connects to the base portion of the iPhone, I noticed one of the gaskets looked like it was folded over into where the connection is made. I cleaned this area with some rubbing alcohol, readjusted the gasket, was careful to move it out of the way during reconnection, and now the Auto Brightness is working again. Hope this helps.
I installed a new screen about a week ago and then attempted to install iOS 11 when it became available, which resulted in my touch screen not working at all. I tried a hard restart many times, completely wiped my phone and restored it from a backup to get iOS 10 back. This process let me get my touch screen working again, but obviously not a good permanent fix. I eventually tried the suggested fix of putting my original apple screen back on, installing iOS 11 (I did that without the home button just fine, btw -- I got lazy and didn't want take it off the replacement screen), and putting the new screen back on. I'm happy to report that everything now works! The touch screen is working properly and everything else appears to be working normally. I hope this helps those of you that still have the original screen.