Does anyone know if you say yes for sponsorship on job applications, you are automatically rejected? Trying to apply to even underquakified roles and getting rejection within a few days.

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Posting as :
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Pretty much.

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Typically yes unless the role has been approved for sponsorship in advance, which is uncommon.

The sponsorship question is pretty much a blanket question. For example, it does not distinguish between new H1B visa sponsorship versus H1B transfer, which are vastly different in terms of risk, processing, etc.
If it is just transfer, would one still need to say yes?

Yes, it usually has now or in the future! So my understanding is that the answer should be yes. Mine is h1b transfers. Don't know if there is a valie in stating No and then wasting everyone's time or stating No and then talking through it once get interview.

Any @recruiters or HR professionals that can share insights?

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