Funny you should bring this up, I think I just observed this phenomenon yesterday! I was moving a few small cats onto fresh milkweed, and a 3rd instar was next to a large 1st instar. I knew that hatchlings would eat other eggs, but thought they were okay at that size. The 3rd instar quickly turned around and started eating the 1st! I tried to intervene, but it was too late.
O well, add it to this year's list of casualties, which is getting pretty long. Won't put small babes next to larger cats anymore!