I have AuCTeX 11.87.
When I use TeX-insert-macro with some text already selected, and use a custom macro name (always the same one), AuCTeX sometimes adds braces around the text I've selected, and sometimes doesn't, in different parts of the same document.
I can't see from the documentation why this should be (indeed, I can't even see that the expected behavior wrt the current selection is documented).