Typinator simulates certain keystroke sequences to select or delete the typed abbreviation before inserting the expansion. If the abbreviation remains, the most likely reason is that the default key combination for backward selection of text (shift + left cursor key) has been assigned a different meaning. To avoid this problem, never use this key combination for navigation, as a menu shortcut, or as a hotkey in other utilities.
A special case is TotalSpaces2, which seems to mess up Typinator's expansion process no matter how you define its hotkeys.