A preview of the Quest Log in Warlords of Draenor states the following:
In Patch 6.0.2, we’ve made a brand-new UI to bring together the Map and the Quest Log with everything you need to manage multiple ongoing adventures. Now when you browse by zone in the Map & Quest Log, you’ll find all of the associated quests you’re on, your progress, and relevant cartography.
In addition to intelligently ordering your quests, the new window (default hotkeys: M or L) gives you more information about your objectives right on the map. It also features scroll-wheel zooming, click-and-hold panning, and a handy View All Quests button—plus, if you leave it open while you’re moving, it fades so that you can see both the map and the landscape you’re venturing into.
In Mists of Pandaria, I can choose to order quests by proximity, and then if I've selected the top quest (which has the closest objective), once I've completed it, my active objective automatically moves to the next closest quest—and as I move around, if a particular quest is now closer, it moves to the top of my quest tracker, and and I can change my active quest to that one.
Here's a screenshot of the quest log from the beta, though:
As you can see, the top quest in my quest tracker on the right is close to my current location, but the map shows that I have a completed quest ready for turn-in considerably closer. While the tracker has definitely changed the order of displayed quests, I can't tell why it's ordering quests in the way that it is, and I no longer have the option of changing the order of displayed quests.
So: how does the sorting algorithm decide how to order my currently displayed quests?