I don't know if I agree that it's an autocorrelation, but one way to explain The Dunning-Krugger Effect is by acknowledging this simple fact:
Most people think that they are an average person, but they can't be all average—there must be some people substantially below the median. Therefore, those people must overestimate their abilities.
This also applies to other aspects, such as attractiveness. Less attractive people would overestimate their attractiveness.
For all of the tests and rebuttals of the Dunning-Kruger effect the people tested are not drawing from the totality of other people, but trying to compare themselves solely to those who also took the same test.
Anyone in a position to take such a test is almost guaranteed to be above average compared to the general population (which includes babies for intellectual tests, or the extremely old for attractiveness tests).
Most people think that they are an average person, but they can't be all average—there must be some people substantially below the median. Therefore, those people must overestimate their abilities.
This also applies to other aspects, such as attractiveness. Less attractive people would overestimate their attractiveness.