Your hypothesis is incorrect. The MSDN article on Creating an AutoRun-Enabled Application says:
DriverPath to specify a directory path where Windows XP searches for driver files, which prevents a lengthy search through the entire contents.
You use the
[DeviceInstall] section with a driver installation to specify directories where Windows XP should search the media for driver files. Under Windows XP, entire media are no longer searched by default, therefore requiring
[DeviceInstall] to specify search locations.
What this means is that using the
DriverPath command in the
DeviceInstall section of the Autorun.inf file, you can only let Windows know where to look for drivers on a driver installation media.
It doesn't say anything about giving you permission to force installation of an unsupported or invalid driver. If Windows can't find a valid device driver in the path specified by
DriverPath, it'll start looking elsewhere and maybe install a generic driver (if available).
To answer your second question, I'll quote this line from the MSDN article you linked with the question:
[DeviceInstall] section is only supported under Windows XP