? What does this mean – regarding bid placed

Hi – testing the auction out, I placed a bid on an item which had a reserve of £850. This is the message that I received as bidder at the side of the web page;

Your max bid is £1,000 and the sellers reserve price is £850.
Note If this auction ends your bid will be increased to match the reserve.

Does that mean the bidder will be paying the 850 and not the 1000.

Thanks – not sure what this facility is trying to do. Can you help please before we go live with it.

Thanks