If it doesn't settle down you need to reduce the automation and, in the worst case, fly the plane.
So you "reduce" the automation and see if that works. How long do you wait for reduced automation to give the desired result before gasp horror you actually are forced to fly the plane. I suggest that instead of "reducing" automation if it doesn't settle down, it would be prudent to disengage the automation immediately and seamlessly fly the plane where you want it to go. Of course if the pilot lacks the manual flying skills to do so, then simply reduce the automation as you say and send out a PAN before resorting to manual flying.
