With AutoFill and AllowCustom off, the "Contains" filter will select the first item that starts with whatever you type, but will never select any item that contains the entered text anywhere else. So if you have typed text that only matches items in the middle of the text, nothing will be selected.
For example, see https://rpfv9c.stackblitz.io
Case 1) If you type "m" then several countries will be shown, and "Mexico" will be selected.
Case 2) If you type "ma" then "Denmark" and "Germany" will be shown, and neither will be selected.
Even if it prioritizes "starts-with" items (like in Case 1 above, where Mexico is not the first item in the list), it should still select "contains" items if none of the filtered items start with the filtering text. So for Case 2, either Denmark or Germany should be auto-selected (probably Denmark)
(edited to correct grammar)