I have my shipping profile set up just like yours, with calculated shipping and then I have a handling fee added on. I have only had one order with multiple items, and it seemed to calculate it correctly. However, I read on another team that Etsy has been having problems with shipping calculations the last couple of days. One woman had an order come up with shipping costing something like $85 for a dozen towels! She ended up losing the customer because she couldn't get it figured out quickly enough. I am going to test your site and see what happens if I put multiple items in my cart, just so you know what is going on.