Is an incident recorded when an outbreak occurs?
You do not increase the incident track.

You've already cited the rule here, which is pretty specific: "An incident happens whenever a plague cube is placed into a location." If a city has three plague cubes, you aren't placing a new plague cube, so the incident rate will not increase.

A compiled FAQ on BGG also has this to say (emphasis mine):


  Incident marker: Always remember to move the incident marker when placing a plague cube on the board.


Also, this forum and this forum on BGG agree with the literal interpretation of the rules that you allude to.