In my experience it works great on some clips and not on others. I usually try it and see what happens. If the results are useable I'm done. If not or I want a more specific look, I correct manually.
Here's what the manual says about Color Balance:
Color balance overview
Final Cut Pro includes an automatic color-balancing feature. When you use the color-balancing feature, Final Cut Pro samples the darkest and lightest areas of the image’s luma channel and adjusts the shadows and highlights in the image to neutralize any color casts. In addition, Final Cut Pro adjusts the image to maximize image contrast, so that the shot occupies the widest available luma range.
The video frame used as the reference frame depends on whether the clip has already been color analyzed:
If the clip has been color analyzed, either during import or while in the Event Browser: The analysis process extracts color balance information for the entire clip. Whether you add a portion of the clip or the entire clip to a project, the color-balancing feature chooses the frame within the project clip that is closest to being correctly balanced. This means that if you add multiple partial clips from the same Event Browser clip to the project, each clip is balanced based on analysis information for its own section of media.
If the clip has not been color analyzed and you balance its color: You can determine the reference frame for a clip selected in the Timeline by moving the playhead to that frame in the clip. If the playhead is on a different clip or you’ve selected a clip in the Event Browser, the clip’s middle frame is used.