This question is answered in the first paragraph of the text at the top (
https://news.ycombinator.com/item?id=26998309). Of course it's manual. If it weren't, we'd have software that could identify good stories, and I'd be somewhere eating grapes. Well, not grapes; and perhaps not eating. writing code, more likely.
HN's system consists of community, software, and moderators, just as it always has. Moderation is a feedback module tacked on to try to prevent the system from landing in any of its default failure modes. That, alas, requires humans.