Your Vcore will fluctuate as your CPU responds to varying loads, especially when power management features are enabled (SpeedStep, Halt, etc.).
For example, at idle, running one core at 1.6GHz, 0.83v (0.85v is the minimum but allow for tolerances) is fine. When your OS fires up, your CPU will use more cores and run at its max "turbo" speed (~2.83GHz) and will require more voltage. If it needed, say, 1.28v at load, your manual override of 1.2v won't be enough.
This is why I would leave it to [Auto] but monitor it under varying loads--especially max load with IntelBurnTest--to ensure the motherboard keeps Vcore within the E8300's specs.