Difference between auto-downloading "all" podcasts vs. "most recent"
From my experience, the Podcast.ipa will stop downloading podcasts if you haven't listened to several recent ones. It will update the list to say that they are there but it will not download them unless, I think, the most recent 3-5 episodes have been placed.

"Most Recent" in the context of Podcast.ipa means it will keep the 3 most recent episodes on your iOS device. It will still sync/save where you last listed to previous episodes but it removes it to conserve space. If you have all selected it will download the most current one and update in the future while retaining all episodes that it/you has/have downloaded until you "physically" delete it from the list/device.

But I too have noticed an issue with the last couple versions of the Podcast.ipa where it doesn't download even though I am subscribed and it is set to download "All" I think this is bug at this point in time and hope that they fix it soon. (http://www.apple.com/feedback/iphone.html)