i know you don't get the second bid back, as i bid on 2 lvl 2 water bottles and purchased both (i was going to be asleep when the auctions ended so i bid on both in case i lost one, they ended up costing me $1 each so i didn't mind the extra spend)
i'm guessing overbidding on an item and then reducing it later allows you to go over your bank max
i'm guessing overbidding on an item and then reducing it later allows you to go over your bank max