Yes this is correct. Warlocks automatically up-cast all their spells at the highest level available. Whenever you'd be able to cast 3rd level spells, all those would be pushed to level 3. It's part of the Warlock's mechanics (very few spell slots, fully up-casted, and getting them back on short rest). There are exceptions like spells that come from pacts that are a once-a-long-rest thing etc.
