It seems that when Search Option Source is set to Automatic that the default Order By is Name ASC. Is there a way to override this behavior? I can select Search Option Source = Model to get the desired result. 
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You are so amazing that you answer your own questions!
We do not flesh out many details on lookup fields precisely because you can create your own model where you ahve much more finely grained control over what is shown when you edit the lookup field. So things like sort order, complex filtering etc just are not going to be in the automatic source.
Ok, that makes sense. Thanks for the clarification.
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