The issue occurs only with the “Current Day” period (not with a shorter period such as 1 hr) and whether or not “Show Entire Current Day” is selected.
The scale is adjusted to include the previous close of the previous day (as you suggested) and not the previous day’s range as I first stated. If I select “Show Only Last Day”, then the scale is correct for the current day.
I keep many open charts with a default period of Current Day and with a Previous Close indicator - so this is important to me. However, Show Only Last Day for the indicator is an acceptable fix (though I would prefer not to select this).