How can I fix Android Market app's "Allow Automatic Updating" checkbox after it hid?
I don't think this is a design feature ... I'm not able to reproduce this at all (except for scrolling down a bit :). 

However, as the Android Market App isn't the most stable app on the Android platform, you might want to try clearing the market app cache.

Go to Settings - Applications - Manage Applications - Select Android Market App  - Click the Clear Cache button.

Restart the Market app and check if the checkbox is present.