Does “Expired” certificate gets removed from the Apple's Developer Portal automatically?
My experience is no - Apple will not mess with your certificates and profiles and you will need to manage them once they are expired.

Think of the hassle of having a cert expire but not seeing it in your list so you know to take action to renew and replace it.

I'm gun shy to let Xcode "fix anything" automatically since then I'm at a disadvantage to remedy things when I need to manually make a change.