This is probably related to a similar bug that happens with all third-party apps (not just GPSapp, I've seen it happen with Empacman, for example) where exiting the app and entering the Hijack menu again causes the behavior you describe. You don't have to turn off the ignition to reproduce the bug, you can reproduce it by going in and out of the app enough times.

As a temporary work-around in your case, you might want to consider making your standby timeout shorter. I've found that changing the timeout to 5 seconds or less tends to work around certain bugs that happen, like the one you described.

Holding the knob pressed brings up gpsapp but not hijack menu.

By the way, in that case, what you're seeing is (I believe) a "stale screen" as Jan described earlier. It's a frame buffer of the screen when GPSapp was running, but it's just a "screen shot", it's not GPSapp actually running.

This also seems to be somehow related to the bug where apps disappear from the GPSapp menu after they're bound to it.