Autocomplete only considers the 1st letter?

I enabled autocomplete for file paths, and was surprised to find it would stop autoappending after the second letter...

Consider

C:\aa123
C:\ab123
C:\ac123

I would type C:\a and it would correctly append C:\aa123

But, if I continue, and type C:\ab it doesn't append the rest.

Is this the correct behavior? If not, any ideas for what's going on?