Hi Blair-
There are both advantages and disadvantages.
On the plus side, keeping your plugins as up-to-date as possible is a major security benefit for your site, in case a plugin needs to patch a vulnerability.
On the negative side, you may end up needing to restore an older state of your website but not have a backup available. For example, if your retention is set to 5, and you have 2 auto-updates per day, your oldest backup will only be two and a half days old.
There are two major recommendations I’d make. First, you can protect important backups from being deleted by the retention settings.
Another recommendation I’d make is to use Timely Auto-Updates to prevent immediately updating when a new update is released. If you set that to a few days, or even a week, then all your auto-updates will happen at once rather than several times a day.