Okay. Added as: http://www.ventismedia.com/mantis/view.php?id=8074

Yes, it only does it when you have just added that item.
If you go back in and edit the item, it does not do it.
It also works in edit mode, if you move the 2nd from last item, down to the last item.

I checked this as well (1399) and it behaves the same for me as it does for Lowlander.

Does it only do that when the item last item added is still in edit mode? I only see it when adding an item and it still is in edit mode (drop-down is still active).

In Autoplaylist Criteria, Advanced, When you add an item to the sort order then Reorder, moving an item upwards to the top, it deletes the first item above it rather than moves it to the bottom of the list.
EG. If you have Sort Item, Artist, Title, Album, then add Genre. Then move Genre to the top, Album is deleted from the list.