When using Application Default Credentials from App Engine, both on the local development server (after logging in via gcloud auth login) and in production, I get the following error message:
java.io.IOException: The Application Default Credentials are not available. They are available if running in Google Compute Engine. Otherwise, the environment variable GOOGLE_APPLICATION_CREDENTIALS must be defined pointing to a file defining the credentials. See https://developers.google.com/accounts/docs/application-default-credentials for more information.

Based on that website, it seems like the behavior should be that the SDK credentials are used in the local development server and the App Engine credentials should be provided without setting the GOOGLE_APPLICATION_CREDENTIALS environment variable.