Image editor with replace option issue

This is related to the edit function not working correctly.

When editing a file, for instance to correct an orientation issue by rotating it 90 degrees, the subsequent workflow results in loosing the original image altogether.

Here are the steps:

1. View in image
2. Select edit
3. Click the rotate option
4. Click Save
5. Select the replace option.
6. The image is lost and replaced by a placeholder.
7. Also the revisions are missing so it is impossible to roll back to the previous version.

I've attached a screen recording that demonstrates the issue.