This indicates there is something wrong... Without seeing it firsthand, I couldn't begin to know what that is... It could be the part, it could be the setup, it could be that it was stuck in the closed position and eventually fell to the open position... It could also indicate that you set it up below the high water line and it needed to be moved up some...
ATO Functionality:
Float Valve:
As water evaporates, the valve drops, opening the line to let gravity fed water in.
Advanced ATO(for want of a better term):
Uses sensors for Low Water Point (where it adds water), Fill point (where it fills the water to), and sometimes Emergency point (often a 3rd sensor higher than the other two in case the fill point is not triggered).
These are simple devices, the water levels are set by you, but should be dictated by the water levels under normal operation of your sump. So, when your system is freshly water changed and everything is running, the return chamber should be at its highest point. This is often the chosen point for the "Fill" sensor. If you have the ability to set the "Low sensor" then you want to place it at whatever amount you feel comfortable with below the fill line, this will also dictate how often water is added. You can set it very far below and only have it fill once a day or once every two days with large amounts of water... Or you can set it relatively close making it fill many times a day with smaller amounts of water. The second way is more optimal. However, some ATO's remove this choice from you, such as is the case with the ReefBreeders Prism, where all 3 sensors are on the same stick and set and pre-determined heights.
In all cases though, your high water level should be dictated by the high water line in your full, running, sump.
When you water change, and you shut off your return pump. It is also a good idea (especially if you're removing water from the sump/vacuuming it out during this process) to turn off your ATO.