I have version 2.83. If I do not set any Limit outgoing KB/s (the button is *NOT* lit) then the incoming torrents come at 5-6 Mbps. But when I set the outgoing limit to say 100Kb/s (the button is not lit), then the incoming drops to like 1-1.5 mbps. Its unclear why outgoing is limiting the incoming. Any suggestions on how to fix that?

Is not it from the protocol to reward with better download speeds the best uploaders?

There is .1% backchannel traffic so when your outgoing goes down, your incoming will reduce by .1% of the outgoing reduction.  That's protocol and error checking back traffic.

Check if the Auto Limit is turned on.