It's a legitimate tactic, I've used it even when not botting.
If you want to drive people out of the market, save up in bulk and just drop a hundred stacks or so on 48hr. That literally sets a roof, unless someone feels like buying you all out.
Do that a few more times, and people start quitting.
If I put up ores at an undercut of 5 silver, and not even two minutes later someone already undercuts me by another 5 silver, that annoys the hell out of me.
I return the favor by then listing all my stacks at 2/3 the price. I bot for personal gain so it is all a profit for me, and I did it because it was really annoying. If you want to continually undercut me just slightly, be ready to take a hit.
yeah... youre the one taking the hit. he gets to sell all of his after your 33% discounted ore gets sold. who loses? you do.