Why does iOS autocorrect some words but not others when using a bluetooth keyboard?
The autocorrect built into iOS since the first iPhone release has been a "smart" autocorrect. It is designed so that we can type quickly, trusting that the keyboard will usually get it right. I've found this to be the case, with the need to only occasionally go back after typing a paragraph to make a correction or two.

In contrast to what you said, I've found that typing "teh" does automatically change to "the" if I continue typing, trusting the keyboard to fix it. There are exceptions. Something to be aware of is that if you use the Backspace key, the keyboard will assume you're manually fixing something; as an example, if you type "teh", don't type any other keys after that, then backspace the "h" and type the "h" again, when you continue by pressing the spacebar, it won't autocorrect the word to "the".

The keyboard gets smarter if you train it by canceling its incorrect suggestions.

It isn't perfect. Sometimes I've noticed that it tries to change "the Lord" to "The Lord" in the middle of a sentence, which is not proper grammar. It also sometimes tries to incorrectly change "its" to "it's", and no matter how many times I correct it, the keyboard doesn't seem to learn from these two mistakes.