This is what you have stated:
You have placed a sell order 1 sat below top ask.
Someone places a sell order 1 sat below yours.
So...
Top Bid
Your Bid(-1 sat)
Someone else's bid(-1 sat below yours)
This is what you have written out. I don't see the problem you are still 1 sat below top ask.
Please correct me if I'm wrong. If I place a sell order using the Ping-Pong settings, say for CAP. I set "Satoshis Below Top Ask" at 1, set the Place To Ask say at 12 CAP and check Scalp Mode, and click "Start Ping-Pong", that seems to work, the Sell order is placed 1 Satoshis lower than the highest Selling price, no problem there. But, if someone else places a sell order for 1 Satoshis less than mine, isn't Ping-Pong suppose to cancel my sell order and then place anew one 1 Satoshis below his? If so, it does not seem to be working. The order is not cancelled and a new one is not placed. Now, if I go to the "Open Orders" tab, manually cancel the order I placed, then the program will submit a new order for 1 Satoshis less than the current Selling price.
Tom