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An animal is vulnerable from predators when taking a dump. It's their smelliest, most vulnerable daily event. This is why cats run around like lunatics before, after or both. It's just a faded/confused instinct.
It's also why they bury it. The perfect cat dump is to dig a deep hole, bury it. And then run away as fast as they can.
Ours does exactly what you describe too although sometimes he tries to run away from his shit while it's dangling from his arse by a hairball. It'd be funny if it didn't involve so much scrubbing.
erm... indoor cats' people. Do your cats run around the flat / house like mad before they do their no.2? Patch runs round like crazy for like 5 mins, then she digs and shits... A LOT! Always A LOT! And she is not even an indoor cat, but he amount of friends, I mean enemies have increased from 1 to 3... so she is still staying put a lot.