The "reset=target" only works if you /assist focus or physically retarget mobs. I don't think it works if you're using the target=focustarget or similar non-target targeting (if you'll forgive the mangled phrase :P). At least, this has been my experience, much like yours, Djarid. Mine is /assist focus based and doesn't have that problem. My experience previously was as follows:

Legend = (current target of my alt) command and context
  1. Focus has target of mob A
  2. (notarget) assist focus
    1. BEGIN: /castsequence [target=focustarget] reset=combat/target/10 immolate, corruption, curse of agony, incinerate, incinerate, incinerate, incinerate
  3. (mob A) immolate
  4. (mob A) corruption
  5. (mob A) CoAgony
  6. --- focus retargets mob B and I press /assist focus key ---
  7. (mob B) immolate
  8. (mob B) corruption
  9. (mob B) CoAgony
  10. (mob B) Incinerate
  11. --- focus targets mob C and I press /assist focus key ---
  12. (mob C) immolate
  13. (mob C) corruption
  14. --- focus targets mob D but I do not press my /assist focus key ---
  15. (mob C) CoAgony on mob D
  16. (mob C) incinerate on mob D
  17. (mob C) incinerate on mob D
  18. etc.
Now, at one point, the macro would forevermore reset to step one when using [target=focustarget] but I think that was fixed in 2.1 or maybe it was fixed on teh PTR pre-2.0...

Others can correct me if this works differently as I've not used a [target=focustarget] macro in many, many moons.