Normlize works in external mixer mode?

First thing to note - it's not an "auto normalize," it's "auto-gain" which is a different function.

Yes, it does work with an external mixer, but you do still have hardware control. In my testing, I found with the auto-gain enabled, the software would try and adjust the internal gain of the entire track to either raise or lower the peak to a certain level, but on the mixer I still needed to set the trim to around 9-10 o'clock to get it peaking at 0dB, but I then had to do less adjustment there per-track as the software was compensating for me.