Automation and using the fade tool are two separate things, but, they work at the same time. As you see here, I have both, and the fades work just fine. They should override the automation. Are you on LPX 10.1.1?
That line down the center is the automation. Click on it to make automation points, then drag them up and down to adjust whatever parameter you have it set to control. I see it, it is activated, although your automation lanes are collapsed, and you have automation data on lower lanes.
You obviously have two parameters with automation control points, but both below the top level parameter lane, which is Volume, and you have the automation lanes collapsed.
OK, let's try to explain this clearly.
To see more than one parameter at a time, click the disclosure triangle to the left of the automation mode menu (read, touch, latch, write). This opens other copies of the track to show other automation parameters all at once.
OK, here's my three parameters. Volume, Pan, and a Native Instrument plugin control parameter. Notice the two I have keyframes, or made control points in are bright. But Volume, my top level has nothing and is dull.
Now I collapse my automation lanes back to show just one track. Now I see what you see, my two parameter lines automated, but they're dull, because it is collapsed, and the only "visible" one is Volume, and it has no data (control points) mapped out, so it is dull and lifeless.
IF I had data entered (control points) for the Volume automation parameter, it would be bright even when my automation lanes were collapsed, and show the control points, because it is the "top level" lane, and is the only one visible for adjusting, when the automation lanes are collapsed.
So the automation is "active", it is working, you just need to expand the lanes. When you mouse over the lane/track, you'll see light gray plus and minus signs in circles, which let you add or delete lanes to show more parameters, or delete the data for a parameter.