Ok, we have checked and everything seems to be working fine
Here is how it works.
If You log into administrator and go to components->k2->items and sort with use of first column (the one on the left of the "checkbox" column that is on the left of "title", then You will see, that products are sorted in "some way" in their own groups. You can move them inside of the group by "dragging" 3 dots icon that is on first columnt on the left.
Now, If You check on your page You will see, that items are truly displayed in correct order, but because You have selected multiple categories, First product is the first one set in "products" category, second is the first one from "automotive" category, third one is the second from "products", fourth one is the second from "automotive" etc.
If You will select only one category, then You can arrange items without any problem.