Is it better to put a monthly deposit into StashAway or throw in one lump sum and let it do the magic? I have been using for 2-3 months and put in one lump sum of money. Which is better?

Dollar cost Averaging ​​​

Throwing it lump sum is more timing the market as you can earn interest, positive and negative, on all your capital while DCA helps to stabalise the risk of loosing money in the long term.

So it's up to you which you risk prefer and can stomach.

Also, on the withdrawing, I think the reason they deduct from you initial deposit is cause it won't make sense to have a negative profit when it is doing well.
Eg. You deposit $100 and it increases to $110 over time. You then take out $20 and the total amount now is $90. So is the $90 due to you having a capital of $100 and a loss of $10 over time or cause the capital has been reduced to $80 and a past increase of $10?

While I think the $20 withdrawn should be proportionally deducted from both the capital and the interest to keep the % increase the same, it may end up confusing more.