In short: No, Babylon.js does NOT automatically do something like adjusting rendering quality based on distance.
I'm no expert but it might simply be that the fragment processing cost is lower when the model occupies a smaller part of the screen while it becomes more expensive when it's in full view close up. Which would be expected to a certain extent and you also mentioned ("smaller number of pixels on screen").
Of course I do not know what kind of model you're using and what hardware you're running. In most usual cases I wouldn't be expecting a huge difference though.