Not necessarily that it’s producing none or not enough
If your body is producing “enough” then you don’t have diabetes, type 1 or 2. That’s where you are incorrect.
Type 1/2 terminology came about before any understanding of the pathology. “Diabetes mellitus” specifically refers to glucosuria. Its a symptom of insulin deficiency - absolute (typical type 1) or relative (typical type 2). It’s like calling pneumonia “cough type 1” and lung cancer “cough type 2”.
When you say “not necessarily… not enough [insulin]” You managed to get wrong what diabetes is entirely - it is necessarily “not enough” insulin again whether type 1 or 2.
Regarding your question about autoimmune destruction of the pancreas- if it is happening but there is enough insulin to maintain glycemic control, then again it is not diabetes type 1 or 2. I’m not sure if there’s uniform widely accepted terminology for it but something like “pre-type 1” is reasonable for layman terms . You have to be careful though because there’s cases of folks who had an autoimmune response but it abated and they ended up not developing (type 1) diabetes.
Its better to think of diabetes as beta cell function (and insulin) +/- and autoantibodies +/-. That leads to 4 combinations, typical type 1 is -,+ and typical type 2 is +,- but the other combinations are like 10+ % of cases (mostly being +,+ as in many “typical” type 2s have some autoantibodies but still produce insulin).
Please see my comment to OP.
If your body is producing “enough” then you don’t have diabetes, type 1 or 2. That’s where they are incorrect.