The reason is because of these 2 lines in
/usr/share/lilypond/2.6.X/scm/auto-beam.scm (or whereever you have
installed lilypond):
((end 1 32 2 4) . ,(ly:make-moment 1 8))
((end 1 32 2 4) . ,(ly:make-moment 3 8))
That is, lilypond has a built-in beam setting that breaks a beam with
a 32nd note every 8th note. It's as if every .ly file you process has
an imaginary #(override-auto-beam-setting '(end 1 32 2 4) 1 8 ) at the
beginning. This is mentioned recent versions of the documentation.
So, to answer you question, you need
#(revert-auto-beam-setting '(end 1 32 2 4) 1 8 )
#(revert-auto-beam-setting '(end 1 32 2 4) 3 8 )
c16. c32 c8 c4 %Bar 1
c8 c16. c32 c4 %Bar 2