If you undercut yourself that is a valid action. You may as well execute the self destruct sequence while sitting in an expensive ship or pod. That is both your decision.
If however someone else and no NPC undercuts you, then it is PVP to me. It forces you to shell out isk to undercut again or have no sale.
Thereby the action of another player is causing you to lose isk. Just in the same way as if your ship blows up due to another players action.
You may decide to avoid a fight in your ship as well as you may decide to not do the undercutting again.
And you may also take this further into market manipulation, but the origin of action is always a player and another player is losing isk.
It is PVP for me, because you are interacting with players and no NPCs.