I did setup an automatic lookup for sourcetype, source and host and all three of them were working. I was able to get back database values like foo\myDB or 'bar\yourDB'
I think the problem is, that either the sourcetype, source or host name do not match. For example automatic lookup in my test for sourcetype=* did not work, but with sourcetype=splunkd_access it worked.
I did use a run everywhere search like this: index=_internal | head 1 | table host database which will return one event of sourcetype=splunkd_access and this was my test automatic lookup in props.conf:
LOOKUP-mydb = mydatabase host AS host OUTPUTNEW database AS database