What does an applicant tracking system do with your resume?
It reads the file and fills in your candidate profile. Greenhouse's help page on resume parsing says it "scans an imported resume and auto-fills appropriate fields." It lists graphics, tables, multiple columns and text boxes as formatting that often causes problems.
Does an ATS reject candidates on its own?
Usually a person decides, though employers can set rules. Greenhouse's Talent Matching FAQ says the feature "does not auto-reject or auto-advance any candidate." In New York City, employers using automated employment decision tools need a yearly bias audit and must notify candidates.
Where can you read more?
The guide on how an ATS works covers parsing, search and ranking in detail. The page comparing Greenhouse, Lever and Workday shows how three systems differ, and the Workday resume guide covers that system's application forms. The glossary entry on a fact-locked resume explains a related term.