Today I learned a bit more on how height:auto works. Let’s say you have a box that has implicit height & width set to 250px. Inside this box you place 1px by 1px image. You give image height: auto. What is happening? This image is taking whole 250px height!
But you do the same with image 250px by 1px (250px width by 1px height) - image is taking only 1px height.
So if you want your image to take only 1px with height:auto make sure that such image has full width of parent.
You can see example in this Codepen.