When attaching a very small (720x480) external display (SmartBeam portable projector) the main laptop display switches to mirroring the smaller display (at an unusable resolution and scale) rather than using it as a secondary monitor.
Below are screenshots of System Information and the desktop.
The Displays menu in System Preferences only shows the main laptop display, but with no options for changing resolution (even when "Show all resolutions" is enabled in the Advanced menu).
Why is this happening and is there a fix?

