How the heck did you take delivery 7/10/13? LolHmmm, just checked out my XTS Premium in the driveway after reading this thread. My vehicle settings menu options stop with "Reverse Tilt Mirror." There is no "Auto Folding Mirror" option on my ride.
I took delivery on 7/10/13, perhaps cars having the Auto Folding Mirror option (whether or not it actually works) are later builds?
Happy New Year
According to the owners manual section 2-19, move the left right switch selector to the middle position and press the down arrow. Press the down arrow again to unfold the mirrors. Is that what you have been doing?