Okay, let's see-
The In reading is for inside the room. Normally the Out would be the temp outside the house, because that's where the probe would be.
The OUT reading is the always the reading from where the probe is, which happens to be in the incubator in this case.
Settle down and think it through- it's the same thing as an indoor outdoor thermometer, you just put the outdoor probe in a different environment.
The temp cycling is probably just the heating element keeping in it the acceptable range.
Is the probe on the same level as the top of the eggs? That's where you want it to be. And not right under the heating element. I like to put if halfway out from the center.
The In temp is going to stay pretty stable, since it's the room temp. The Out is your real concern, because that's the reading from inside the bator. It will not stay perfectly still- the heating element cycling, the room temp and how often you open the incubator are all going to change it. As long as you keep it between 99 and 100.5 it should be fine.
I suggest you sit back and stop fiddling with it, and let it truly stabilize for a while. Make notes of temp swings if there are any, but quit trying to micro-manage it.
Good luck and happy hatching!