1) Good question. Does it drop back?

2) How do you know it was a shill. For Sure?

3) Bid retractions show up on your profile.

4) You don't know if that $17.50 is a high bid or if they actually bid much more, but eBay just did the minimum automatic increase.

One the other side, if I just bid $17.00 for something and it's my higest bid, and I know it's a shill, I'd say leave the bid and let them win it and pay the fees for Not Selling the item. Stick it to them.