Well, yes. That's basically what I said. That the pirates are forcing the townspeople to auction their belongings to... the pirates.
That's where the breakdown is. Why are the pirates making other members of their crew pay them for things that they are stealing? From the dialogue that was added/changed with the Sparrow additions, we know that these pirates are members of the same crew, and are sacking the town in search of Jack Sparrow. So, it's not like they're auctioning off the goods to rival pirate crews, as somebody else postulated.
The scene would honestly make more sense if the pirates were, in fact, auctioning the townspeople's belongings back to them at gunpoint. It would also add a nice layer of dark comedy.
Or, ya know, just leave the scene the way it was?