dilligaf,
PAS flips addresses all the time, probably about 90-95 percent of the time, when it flips an address, it is doing what you saw, flipping an incorrect address to a correct address. Usually you never hear about those flips, as they lead to a correct delivery and that is the end of it. The system does however, flip and get it wrong, sometimes very wrong.
BTW, you mention you have not gotten used to looking solely at the PAL. That is good, please do not ever get used to looking solely at the PAL. For a driver, the PAL is mostly for the sequence number, which is listed in EDD, so you can find the package with little effort after looking at EDD. You should still be going off the address label when delivering.