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Quirk in system with Bid below Increment?

Thought I would have a stab at the impossible tonight - digital camera repair for idiots:

Nikon Coolpix camera

This camera stood at around £21, so I lodged a bid of £31.50 with AS. Rather to my surprise, I found I lost to a bid of £31.01 as AS did not place a bid for this reason:
"Bid Below Increment Your snipe could not be placed because your maximum bid was below the next bid increment for the item"

I thought this did not apply if you were:
a. The final bid
b. You outbid the last bidder by almost any amount

AS themselves say:
"Note: A bidder may be outbid by less than a full increment. This would happen if the winning bidder's maximum bid beats the second highest maximum by an amount less than the full increment"

Is it that I am (once again!) thoroughly confused or has AS got itself in a twist?

Any thoughts? (If this topic has `been discussed ad nauseam, please point me in the right direction!)
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