This is a hard thing to answer as I've done both ways lol. For smaller sites, I wouldn't really mind but for bigger ones, manual is better. Manual interlinking is definitely better because you can do it using different phrases that can be related to another post rather than automatically showing the same words. It's just more organic that way and better for user experience which Google is keen on.
I've actually done this auto linking to category pages instead of posts on my older sites so I've played/experimented with this function. I still would recommend the old fashioned manual way as it makes more sense.

