Hi!
1. I will definitely have to look at this one via the back-end, as I am not able to replicate the issue on my test servers unfortunately.
Does anything change if you choose the Use all from {taxonomy} option there?
2. Do you mean the results page title? That code is to change the live result titles to append the category/taxonomy term names to them. The page title is a theme related feature, the plugin cannot affect that. You will have to change that somewhere on the theme options, or via custom code, it depends on the theme I guess.