"Autocomplete is great for regular casual situations. I'm just wondering why people handling sensitive information have it turned on"
Without autocomplete you have to not make a typo every time you type an email address. I reckon autocomplete prevents emails going to the wrong recipient more often than not having it. And when you do screw up it goes to someone you already have a relationship with and therefore may cooperate, as seems to be the case here.
However, if your emails are spreading gossip you probably wish it did go to a complete stranger rather than the wrong friend/colleague.