Hm, you're saying the cart says "Promotion: testing", but the discount settings you described above say the code should be "testing123" (rather than just "testing").
If you are using Buy Now buttons (rather than cart buttons) with the modification to accept a discount code, that will pass along to checkout whatever discount code is entered, even if it does not match any discount, so that may be happening here?
Also, bear in mind these limitations to using discount codes with Buy Now buttons:
http://www.e-junkie.com/ej/faq.discounts.buy-now.htm
If you need further assistance with this, please provide the URL of your purchase page where you're using our buttons, so we could have a look for ourselves to see what may be going on there.