I suspect that Joe was cut and Sarah was allowed to stay because the producers wanted the final four to be 2 men and 2 women.
About Joe bowing out or not bowing out (from the preview)... I wonder if maybe Joe DIDN'T bow out, did his act on the block, and did a great job - a much better job than Sarah has done her two times on the block. Wayne needed to cut Joe, and he couldn't look biased cutting him after a good performance, so they made it look like he stepped aside.
About Delisco... I'm another one who thinks he has a ton of talent and presence, and thinks the "final showdown" will be between him and Jennifer, with Jennifer having a slight advantage. I've thought this since episode 2 (well really episode 3, but it was the second show aired - you know what I mean!). In the very beginning I thought Paul would win, and we all know what a winner he turned out to be!