KevinTheJedi The original issue was that when I replied to the ticket Auto-Response (not the agent alert) it would create a new ticket every time. And every subsequent reply to the ticket Auto-Response created by that new ticket threaded correctly.
But, it seems like Auto-Response threading works properly if I include and populate the Issue Details field in the ticket template.
If one of the devs for the system cant figure out why our system is weird (even on a completely bone stock install) then I think I should just do the rain dance and include the Issue Details field and tell everyone to fill it out