When the option "Automatically encrypt E-mail whenever possible" is selected in Configure KMail... --> Security --> Composing, KMail never encrypts a message to a recipient for whome you have a trusted public key, whether the recipient is manually typed into the To: field, selected from the Select Contacts dialogue or automatically populated through the Reply command.
I read code and it's never used in kmail
Will fix it soon
Git commit f9ee4db74e75b11cb989cc2992aa5019b7556a91 by Montel Laurent.
Committed on 29/08/2012 at 13:59.
Pushed by mlaurent into branch 'KDE/4.9'.
Fix Bug 305346 - KMail never automatically encrypts E-mail
config was not used
M +9 -9 kmail/configuredialog.cpp
M +0 -11 kmail/kmail.kcfg.cmake
M +1 -63 kmail/kmcomposewin.cpp
M +0 -11 kmail/kmcomposewin.h
M +75 -15 messagecomposer/composerviewbase.cpp
M +12 -0 messagecomposer/composerviewbase.h
M +11 -0 messagecomposer/messagecomposer.kcfg.cmake