True, but as this extract from Dynaloader.pm shows, it looks in site/lib/auto/module first:

    foreach (@INC) {
    chop($_ = VMS::Filespec::unixpath($_)) if $Is_VMS;
    my $dir;
    if ($Is_MacOS) {
        my $path = $_;
        if ($Mac_FS && ! -d $path) {
        $path = Mac::FileSpec::Unixish::nativize($path);
        }
        $path .= ":"  unless /:$/;
        $dir = "${path}auto:$modpname";
    } else {
        $dir = "$_/auto/$modpname";
    }
    
    next unless -d $dir; # skip over uninteresting directories
    
    # check for common cases to avoid autoload of dl_findfile
    my $try = $Is_MacOS ? "$dir:$modfname.$dl_dlext" : "$dir/$modfname
+.$dl_dlext";
    last if $file = ($do_expand) ? dl_expandspec($try) : ((-f $try) &&
+ $try);
    
    # no luck here, save dir for possible later dl_findfile search
    push @dirs, $dir;
    }
[download]

After that, it basically goes off on a mind-blowingly slow and complicated tour of every directory in @INC and a few other places. The question is: why? What does this 'flexibily' buy anyone? It's just more complexity for no gain.

The danger of omitting the your is that Simple.dll from the XS version of XML::Simple overwrites Simple.dll from the XS version of CGI::Simple. Omitting the auto compounds the problem.

Define a rule, document it and stick to it. And then, when the dll isn't found the module can report site/lib/auto/your/module.dll not found. Currently, they cannot do that because they would have to say:

Couldn't find Module.dll in site/lib/auto/your, or site/lib/auto or si
+te/lib or site/lib/some/other/module/You/Used or site/lib/some/Other/
+Random/Place/WeT/hought/To/Try/ ...
[download]

Sigh! If only we could go back in time.