Auto-numbering multi disc

I am trying number track using Auto-numbering wizard. When the discnumber changed from 1 to 2, I thought the track would reset to 1. Is that not what the “Reset track counter on next disc” does?

It is.
However, you need to define what "next disc" means.
Just choose the checkbox above ("Next disc on change of") and what exactly in your case is "next disc". For example DISCNUMBER? Or ALBUM? Or any other field that means "this is my next disc".

when DISCNUMBER changes from 1, 2, 3, etc

Then you can try it with: