I would like to tell couple of things.
First of all I don't have a lot of idea about this CPT but would believe that while on CPT, you can work and I think you have to attend college also during this time. I myself was an F1 student, went through OPT and then to H1 later on. So not a lot of CPT ideas.
-If your CPT is expiring while the H1B is pending, you will have to leave the job as your current employer says but you don't have to leave the country. You just have to sit and wait until your H1B approval/rejection decision comes. If it's approved you can start working for the employer if they still want you. I believe that your employer still wants you to work for them as you have already worked for them and gathered experience rather than hire a new one and go through all new process to train. I have seen this kind of situation first hand where employee had to quit because work permit expired and hired him back when his work permit arrived. So, i think all you need to do now is to convince your employer that your H1B will come soon and will start working again as it comes.
-Another thing that I want to explain is of the USCIS website. Don't believe 100% on the case result shown on its website. I have heard/seen of several cases, including mine, that it's not correct always. Due to some issues, they are late in updating many many cases.
Good luck uscis_pidit