Anne, I can see how you might be confused. If a recipe is working fine and you want to switch to a smaller pan and you want a flat top, THEN you increase baking powder. Personally, I like a rounded top on cupcakes, not a flat one, so I never increase baking powder.
This recipe (Golden Butter Cream Cake) is sort of half way between a pound and a layer cake. Pound cake can be somewhat lacking in structure, needing to be baked in a tube pan in order to work (and then it doesn’t matter if the top dips a little, because you will flip it to serve). A layer cake will generally have more structure, allowing it to be baked in a pan without a tube in the middle. I bet it would work well in one of those mini-bundt pans, you know, the ones that look like a cupcake-sized ring-shaped cake, with a hole in the middle. Then you could put fruit in the middle, yum.
If any cake recipe is sagging in the middle, it either doesn’t have enough structure or is underbaked. One way to boost structure is to decrease baking powder. Another is to increase mixing times. And raising your oven temp might help with these cupcakes because that can set the sides faster, while the center has time to rise.
So my suggestions would be:
1. keep the golden butter cake recipe as is and try the mini ring-shaped cake pan.
2. reduce the baking powder to 1tsp, increase mixing times to 2min/30sec/30sec/30sec, and if that doesn’t do the trick increase your oven temp to 375F, though this can give your cupcakes browner edges.
3. try the sour cream butter cake, the golden almond and downy yellow, all of which work well for cupcakes. If you like rounded tops, leave the baking powder as is, or increase it for flatter tops.
Looking at your layer cake makes me ask two questions: which mixer are you using? (lesser powered mixers need longer beating times and/or faster speeds) and are you using Baker’s Joy on the pans?
Also, you filled the layer pans 2/3 full, I couldn’t confirm it (Cake Bible didn’t specify how full pan is), but I suspect this cake may do a little better at half full.