Further to putney's post -

This is on the bottom of everyone's bidding list,

* If you have been outbid, you may still become the high bidder if, for example, the seller cancels a bid received by another bidder or lowers a reserve price.

they didn't bid on the other item until they were outbid on the other.

i would have done the same. who cares what ebay writes on the bottom of the page.

how many contracts have you signed without reading....me plenty.

I would first have a good look at the withdrawn bid; if it is somebody who seems to be bidding a lot on the one seller's items and withdrawing, I would be withdrawing without second thought.  Lie or not lie.

But remeber that in the last 12 hours you can only withdraw a bid if it was made less than 1 hour ago.