Your documentation says:
When set to “auto”, the chart automatically decides whether to place labels inside or outside based on the available space.
This does not work.
Looks like we’re going to have to add some custom code to ensure the render space is square, as inside does not work for small segments. Example: http://jsfiddle.net/qcncv0qn/3/
I urge you to consider this as a bug, and provide improved rendering of labels. I would suggest that when h > w or w > h that the labels are moved upwards or sideways so they can be accommodated properly.