I'm burning 3940 calories???

OK so I have myself set at light activity level.  I work a desk job but I have young kids and was exercising lightly in the mornings with Wii Fit.

Recently I have begun running/walking (couch to 5k) in the mornings and strength training on my off-days so doing more strenuous exercise, 6 days per week now.  Oh, and I also nurse exclusively my 3 month old which supposedly burns about 500 calories.  At that level, so today starting with my 42 minute walk/run and 500 cals for nursing, CC had me set at an estimated burn of 3700 (ish).

Since I'm exercising more I was thinking maybe I should change my activity level, since I'm doing more than 30 minutes of exercise 6 days per week... I switched it and it say 3940 calories!!  That seems like a lot.  I know I'm overweight (223 and 5'5) but it just seems so odd.  Some days it's a stretch already to make sure I ONLY run a 1000 cal deficit but I get the feeling I'm running more of a deficit than I think - I've lost 13 lbs in the 28 days since I started exercising and keeping track.

I don't want to change my activity level on here yet until it's been more than a week for my higher level of activity... So, would that be correct?  It just seems weird that I'd need to eat almost 3000 calories even to have a 1000 cal deficit. 

You have yourself as light activity and log your exercise?   If you are you shouldn't be.  That's double dipping .

You either pick sedentary and log everything, or you pick light and only log out of the ordinary activity, or pick moderate/very active and log nothing.

OK weird becuase I was told that when I log my exercise it would replace the calories for that part.  IE if I am at a light exercise setting, it assumes a certain number of calories per hour or minute because by default, someone who is normally lightly active will burn more calories sitting around than someone who is normally sedentary and also sitting around.

So, for instance if it assumes that I burn 2000 calories without doing anything, that's 1.39 cals per minute.  But then if I go do an exercise that made me burn 200 calories in 40 minutes, then it changes it to be 2144.4 calories, because it already assumes I burned 55.6 calories during that 40 minue period (55.6 = 1.39 cals x 40 minutes).  So I'm not adding the 200 ON TOP of the 55.6 calories, but it said instead of 55.6 calories for that 40 minutes, I burned 200.

Or at least that's how I understood it worked.  Is that not the case?  I had previously set myself to sedentary and someone told me not to because I was lightly active and so by default I would burn more calories during my day than a sedentary person, not counting the activity itself but just because my activity level kept my metabolism up higher. 

So basically that the CC estimate didn't actually include the activities themselves, but estimated a normal calorie burn based on activity level.  IE - a person who trains for hours and runs 30 miles per week is going to burn more calories while asleep than someone who is completely sedentary.  THat's how I thought it worked.  If I'm wrong, though, that would explain it.  But then again, I wonder why would we have all these activities to log in?  Like... my job.  I log in my job because it is a higher calorie amount burned than just sitting, though not by much.  If that were already included, then why would it even be an option?  And how would CC differentiate someone like me who has a desk job vs. someone like me who has a waitress job vs. someone like me who works in a daycare...

Also - if I'm double dipping, shouldn't I be gaining weight?  I've been losing pretty rapidly... my concern is actually that I think I'm losing TOO rapidly.

Now I'm really confused... lol