SYSTEM tablespace defaulting to dictionary managed and limited extents

We create our new databases with a SQL script specifying the system, sysaux, temp, and undo tablespaces with explicit datafile names. No default storage clause is included. My reading of the documentation is that all O19 tablespaces should be created as locally managed and autoallocated. Why are the databases created with dictionary extent management on the SYSTEM tablespace only?

We keep running into problems with release updates on one database due to extent management error in SYSTEM.

I'm thinking we may need to re-create the databases with explicit options for the extent management and not reply on default. It's puzzling though.