W3TC breaks when active in different directories

I have two WordPress sites installed in different, non-nested directories:

Root
/sitename1
/sitename2

They have different domains pointing at them, and it is not a Multisite setup.
Load times were very slow until I enabled and configured W3TC v0.9.4 on Site1 – the results were amazing! I went to Site2 and did the same, which initially seemed successful, but when I went back to the first site the load times were worse than ever. Also, revisiting Site2 showed that that too was very slow again.

When I finally managed to get back into the Site2/wp-admin, I deactivated W3TC. Suddenly Site1 was loading like lightning again.

W3TC now says it is enabled in ‘community mode’ by the way. Also, my web hosts enabled zlib.output_compression, but if that was the problem, why would the working site run perfectly until the other had W3TC active as well?

Does anyone know what’s going on? I have had a look at the root .htaccess file, and there is nothing about W3TC in there as far as I can see:

# Begin default subdomain redirect #
RewriteEngine on
RewriteCond %{HTTP_HOST} ^site2.com
RewriteRule ^(.*)$ http://www.site2.com/$1 [R=permanent,L]

# End default subdomain redirect #
# Begin cache control #
ExpiresActive on
ExpiresDefault "now plus 60 minutes"
ExpiresByType text/html "now plus 60 minutes"
<FilesMatch "\.(css|bmp|png|ico|gff|htm|html|js|jpg|jpeg|gif|gcf)$">
FileETag MTime Size
ExpiresDefault "now plus 60 minutes"
</FilesMatch>

# End cache control #

<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>

I have to say I’m mystified. Any suggestions?

https://wordpress.org/plugins/w3-total-cache/