Incremental backup numbering does not work TIH 2010

I am running Win XP Home SP3 with TIH 2010, build 7154

I created an incremental backup with the request to create a new backup after 3 incrementals.
I also requested that previous backup archives should be deleted.

What should have happened is:
Test
Test1
Test2
Test3
--------------------The above should have been deleted and the cycle restarted. What happened was, the following new backups were created:
Test(1)
Test(1)1
Test(1)2
Test(1)3
Test(1)4

At which point I ran out of disk space. First, the deletion of the archive after three increments did not take place. Second, it created four (4) increments in the second pass, not three!

Clearly, TIH 2010 cannot follow instructions and cannot count. :-)

Has anyone experienced this? Is there a fix or workaround?
Thanks