Why does ebay say "you have been outbid by someone's highest bid" when that's obviously not true?

[*vyolla*]

Have you not been outbid then?

[sharmis66]

Can someone tell me if I have been outbid and don't retract, will seller come back to me if the item isn't paid for?.
I have been retracting many bids when outbid and clearly that isn't allowed either. I started doing this after a seller came back with higher price demanding me to buy when the highest bidder didn't. Please tell me what to do in such cases can I refuse without retraction n putting my account in trouble?