you win the prize for being the first person to report the only known bug that was shipped with the release :) i wondered how long it would take!
so unfortunately, this is a known problem. i have been working to resolve the issue with Michael Tyson from Audiobus, but we weren't able to track it down in time for the release (and i didn't want to hold it up any longer). basically what is going on is some sort of conflict with IAA, audiobus, and Borderlands' handling of the input. for some unknown reason, when input recording is turned on and borderlands is in the Sender slot (and only when it is in the Sender slot - works perfectly fine with filter and receiver), the code that handles input audio gets called twice in a row by the system for every collection of samples that come into the app. since borderlands pushes any new incoming samples into the recording sound, it effectively ends up pushing two copies of each set of audio into the sound in a row (i was tipped off to this by the fact that the input recording playhead moves twice as fast through the sound in this case). the glitches you are hearing are due to discontinuities in the audio that result from this duplication.
in the coming weeks, i will be spending more time investigating this issue and will push an update to the store as soon as it is fixed. for now, i would recommend only using the realtime input recording feature when the app is in the filter or receiver ports.
sorry for the inconvenience, and thanks for reporting the problem along with your settings! it's always helpful to have clear descriptions when things go wrong.
best,
chris