Is "A pointer is returned to an automatic variable" correct and unambiguous about what is "returned"?

Your understanding may be correct. I believe your rephrasing, "a pointer to an automatic variable is returned", is very likely what the original writer meant. That, however, leaves the final part of the sentence, "in a previous function call," to be placed with 'a pointer' or with 'an automatic variable'.

Based on its location in the original reference, I would assume the whole sentence would be rewritten, "A pointer to an automatic variable in a previous function call is returned."

It is unlikely that the original writer meant, "A pointer in a previous function call is returned to an automatic variable."

Since the original sentence is a bit confusing, as you note, it's difficult to know exactly what the writer meant.