It's not haywire. You gained the 400 calories because your activity put you 400 calories above your baseline. However, you "lost" 17 calories from the surplus when your activity level dipped below the predicted baseline. Get out and walk again for a bit and you'll gain them back.

This is why I use 20% off of my TDEE to determine the number of calories I allow myself. The Fitbit calories bounce up and down as the predicted amount changes.

Pretty much. It is entierly possible to get a pretty big surplus early on (for example, I often go jogging at night and sometimes I'll be out running past midnight) and then hours later be at a deficit because overall you didn't do as much work as Fitbit predicited based on your reported activity level.

All that said, Fitbit is a good system and as long as you're meeting your daily calorie burning goal (mine is 2800 kcals per day, for example) you'll do well.