I was thinking about reporting this but maybe it's normal… I don't know, can someone check?
Very easy reproductable steps.

Cheers

video: http://screencast.com/t/nEuZifks0MH [screencast.com]

build 13.0.0498

I think the behaviour is mostly correct. I think that most other 3D applications only allow an SRT transform order. I can see why since the results when you change this can be unintuitive.

- The handle is placed at the “rotation origin”. It's a lot easier to see if you've just translated and then try rotating. If you combine with a scale, then you also get the geometry warping during the rotate.
- The scale value is changed because it's necessary to do so because the transformation is done around the “rotation origin” in world space, thus causing all sorts of weird values in order to support this.
- I thought that if you enable “Gimbal Mode” when you right-click on the handle to only modify the rotates. It doesn't seem to work for me, but maybe there's some other weird reason. I'd log a bug for this case, but expect it to be a low priority issue since it's fairly uncommon to use this different transform order.