Hi birdsomg,
Thanks for contributing to our forum. I just had a chance to review the details of the item you mentioned and, as the details you provided suggest, it appears the "Bid Below Increment" status was assigned to this snipe incorrectly.
We have actually seen this behavior a handful of times before and our technical team is currently looking into correcting the issue with a future update to our software.
In this particular case, the correct status should have been “Not in Time”, which generally means that our system attempted to place a bid on the item on your behalf but that the auction had already ended by the time the request was received by eBay.
Given that you are using the recommended lead time of 5 seconds, failures of this nature should be very rare. Unfortunately, they do occur on occasion though.
I'm sorry to hear that we were unable to help you win this item, and that I was unable to get back to you about this sooner. If you ever need immediate assistance with your account, you can always contact our Customer Support team directly by mousing over the “Help” tab and selecting the “Contact Support” option.
-Mike