I'm sorry, I don't agree with your post.
Never put in at a maximum more than you are willing to pay.
This is an auction, not a store.
eBay is not acting as your agent. You are using your own buying account. An auction agent is a different animal. eBay is just a marketing platform.
I'm in no means condoning the actions of the sellers. I'm stressing though, you are dealing with a street vendor environment.
When eBay places bids on my behalf they are acting as my bidding agent, in my opinion.
Once the shill bidder made his fraudulent bid, my agent -- acting prudently, would not bid again on that item. The sale and the pool of bidders and sellers in it are now tainted by fraud. In this particular case, my maximum bid is now public. In such circumstance a reasonable buying agent would not rebid at all on the item. Yet Ebay does, that is imprudent and is not only a practice that allows fraud -- it is a practise that REWARDS fraud.