Hi,
The default auto non-uniform mesh in FDTD generates mesh based on the refractive indices of the material (along with other factors). The effective wavelength of EM fields is shorter in high index materials, so, the algortithm automatically generates smaller mesh which implies that the density of the meshing is higher. And then as you go from higher-index material to lower-index material the mesh doesn't change suddenly but rather in a gradual/graded manner, which is also decided by the algorithm.
So, if you have chosen the default "auto non-uniform" mesh, the mesh should be graded at the interfaces of materials with different indices. With "custom non-uniform" you can also change the grading factor.
From your screenshot it seems to me that you have either used uniform mesh, or mesh override region, which is why the mesh is not graded but rather uniform. Is that the case?
Regards,
Amrita