Mixed iodide-bromide methylammonium lead perovskite (MAPbIxBr3-x) nanocrystals (NCs) hold promise for use in light-emitting applications owing to the size- and composition-tunability of their bandgap. However, the segregation of halides during light exposure causes their band gaps to become unstable and narrow. Here, we use transient absorption spectroscopy to track excited-state dynamics during photoinduced halide segregation. The Auger recombination dynamics are observed to accelerate as the bandgap narrows, suggesting enhanced electron-hole overlap. We simulate the motion of iodide within the NC and estimate the evolving bandgap and electron-hole overlap during two possible mechanisms of halide segregation. Our results support a segregation mechanism in which iodide anions form a domain within the NC, rather than a mechanism in which iodide anions independently segregate toward the NC surface. Such mechanistic insight will contribute to future NC bandgap stabilization strategies.