Looking at the partman logs:
Before state:
parted_server: OUT: 1   1048576-2047868927      2046820352      primary unknown 
/dev/sda1       
parted_server: OUT: 5   2048917504-12548308991  10499391488     logical ext4    
/dev/sda5       
parted_server: OUT: 6   12549357568-12748587007 199229440       logical ext4    
/dev/sda6       
parted_server: OUT: 7   12749635584-52748615679 39998980096     logical ext4    
/dev/sda7       
parted_server: OUT: -1  52748615680-160041885695        107293270016    pri/log 
free    /dev/sda-1      

The last bit shows that there was ~ 10GB of empty disk space available.

Resize_use_free auto partition mode was available:
/lib/partman/automatically_partition/10resize_use_free/choices: Found resizable 
partition '/var/lib/partman/devices/=dev=sda//12749635584-52748615679' 
(/dev/sda7) with 10968731648 bytes free

The end result became:
parted_server: OUT: 1   1048576-2047868927      2046820352      primary unknown 
/dev/sda1       
parted_server: OUT: 5   2048917504-12548308991  10499391488     logical ext4    
/dev/sda5       
parted_server: OUT: 6   12549357568-12748587007 199229440       logical ext4    
/dev/sda6       
parted_server: OUT: 7   12749635584-52748615679 39998980096     logical ext4    
/dev/sda7       
parted_server: OUT: 8   52749664256-157895622655        105145958400    logical 
ext4    /dev/sda8       
parted_server: OUT: 9   157896671232-160041009151       2144337920      logical 
linux-swap      /dev/sda9

So indeed biggest free space was used, which is expected behaviour.

** Changed in: ubiquity (Ubuntu Quantal)
       Status: Incomplete => Invalid

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https://bugs.launchpad.net/bugs/1046627

Title:
  Install Ubuntu XX.XX alongside SYSTEM YY screen missing

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