PL is borderline overlapped and about 1 boat width to leeward, the exact relationship is however unimportant (bear with me) but it is clear to all that PW cannot gybe until PL does without breaking rule 15. 

They gradually approach from clear astern a Symmetrical Boat, also on Port Tack, who is running deeper to the same mark and will not need to gybe.  The Symmetrical boat is not racing PL and PW, so the Symmetrical boat does not defend but simply wishes them to get on past as soon as possible.

PW passes to windward of the Symmetrical Boat, but for reasons known only to themselves, PL establishes an overlap within 1 boat width to leeward of the Symmetrical Boat.  Who sighs with frustration and comes up to match the course that both PL and PW have been maintaining before they established the overlap.

PW sees this as a golden opportunity to break the control that PL had over them, and reacts by going very high, clearly intending to create enough space to gybe onto Starboard.

PL reacts by altering course towards PW, heading up far higher than their previously maintained course, in order to try and stop them gaining the separation they would need to execute a gybe.  A debate about proper course breaks out between PL and the now very annoyed Symmetrical boat, who points out that they are being taken higher than the course PL was sailing before they established the overlap a course that they had been sailing for some minutes previously and that matched the course of the other identical boats in sight, and a course that has resulted in both boats sailing away from the mark and struggling to keep kites flying. The Symmetrical boat never the less reacts to PL's luff and keeps clear.  

The definition of PROPER COURSE says "A course a boat would sail to finish as soon as possible in the absence of the other boats referred to in the rule using the term."

There is no doubt that without the symmetrical boat PL would have reacted to PW's manoeuvring by going with them, they were basically match racing for a place on the final meaningful leg.  (The next mark being a leeward mark followed by a very short fetch to the finish).  But without the symmetrical boat PW would not have done that.  It is also true that heading up in this way is not the course for PL to finish as soon as possible, as it is clearly away from their best VMG it's just a course that might enable them to finish in front of another boat.  

Question.  Did PL break rule 17?

Yes. 

But could they not argue that they would have gone high if Symmetric wasn't there if PW had sailed that course?  

They could argue whatever they like, the definition of Proper Course is 'in the absence of other boats' so PW's actions are immaterial. 

Thanks.  That clarifies it in my mind!

[Pedant hat] Minor point, but it's "a course a boat would sail to finish as soon as possible in the absence of the other boats referred to in the rule using the term...."

So take this scenario below, and saying that 17 applies between yellow and blue. When determining yellow's proper course, we can "remove" blue and see what that does to yellow's course. But yellow's proper course is to avoid green, so even though she sails higher than before, she doesn't sail higher than her proper course, and doesn't break 17. 

[/Ph]

As yellow is going to windward of green in your example she is not subject to Rule 17 with regards to Green though. Green however can use rule 11 should she choose to make life difficult for Yellow (and possibly Blue).

Seeing as how we've got our pedant hats on, Y's obligation is not to 'avoid' G.  It is to keep clear of G.

But Y's proper course is not only the course necessary to keep clear of G:  it is the course she would sail to best speed.

Y could sail somewhat hotter than as illustrated so as to avoid turbulence from G (or indeed, to avoid tempting G to luff aggressively), and that would still be her proper course.