Both sensors are working properly but yes, the switching downsteam sensor indicates that your cat doesn't have the ability to store oxygen very well. If this where another vehicle I'd say your cat is wasted and should be replaced.
However, from my experience this is quite normal. The cats on the SVT aren't very efficient and the ONLY time I've ever seen a steady downstream signal on one of these was at about 3000rpm down the highway. I'm guessing the VCT system does a good job of controlling NOx so HC and CO are the only post-combustion emissions the cat needs to deal with. Naturally, a well-tuned mild 2.0L isn't going to have very high HC and CO levels so the emissions threashold required to set the P0420 DTC is rather generous. In other words, eventhough the downstream signal switches like crazy, the emissions are low enough that the government doesn't require a code to be set.
But I wouldn't be surprised if your code comes back. Eventhough your signals look like other SVT's, your PCM obviously saw an excessive switchrate so you either had a momentary fuel quality issue or your cat is loosing it's ability to store what little oxygen it's inteded to store...