I have another example of this bug and am including a test file as requested.
You'll see that the bounding box resets every time a (rotational) transformation occurs, and the individual components suffer the same issue even after ungrouping the object. *BUT* the bounding box of a different object in the same file *DOES NOT* reset and behaves normally, inferring that this isn't a bug that is specific to a version of Illustrator or even a file. I am currently running CC 26.5 on an iMac OS Monterey 12.3.1.

@Egor, sounds reasonable to have some customisation, maybe the traditional "have an option for legacy area type transform controls" way.

Though the main issue with resetting object-associated bounding box is more disturbing.

@Egor — it's interesting that you mention giving the user the ability to change the behavior. In the Procreate app, each bounding box has two handles, one controls rotation, and the other rotates the bounding box itself. In Illustrator, this could be achieved if there was a small lock / unlock icon attached to the bounding box. There is already precedence for this visually in how InDesign has the little box for linking text containers together.

Agree, cases differ. Let’s stick to 'Ai should allow to customize the behaviour' — and make it consistent across tools. What do you say about this approach? Is it OK to have all the tools behave the same for this, or does it make sense for some to always work with text or container?

@Egor, well, i guess it's debatable whether should text rotate with the box by modifiers, although i'd like to see the text as a main object so all the transformations should be applied to the text by default not to the box, and box should be treated as an independent rectangle only after selecting it specifically, with the group selection tool. But that's not the main point. Thing is, bounding box of the rectangle resets immediately after rotation (with corner modifiers). Maybe it's because "text is a main object so the bounding box stays with text" but as for me it creates more confusion than ergonomics. As i see this, area type text should rotate with its container no matter what tool does rotation. If i want to rotate container rectangle i'll select it specifically. I think it'd be better to have some kind of modifier for area type which can apply rotation only to the text leaving container intact not the other way around.

Egor — You're probably right. I guess bugs are the inherent nature of code and can't be attributed to the fault of an engineer, and it's also not possible to find every bug through quality control.

@Serge, the latest video of yours is actually an expected behaviour — 'at least for me'. This is why I use the bounding box only for area text transformations — Ai applies scaling and rotation with bbox to the path rather then the whole object, assuming this is what a user want to do.
Free Transform, Scale and Rotate, however, act on the whole object.

To make these work just like the bbox does, you have to select the path of the area text, precisely, with a Group Selection toll (this is what I often do).

But if you add another object in a selection along with an area text, even the bbox starts to scale and rotate the whole text instead of a path of it.

'Expected' here means it has some logic behind it, and users can get familiarized about it... but I agree it can be treated differently. Like with a general option to Transform Area Text perhaps, which just toggle the behaviour? Note 'Area' here, because a point type text always gets scaled and rotated.

There are some requests about it as I recall, so you might want to search for them...

Egor, while making the sample file i noticed another bug with rotating objects, at least as i perceive it (attach included). Rotating paragraph text box with rotate tool rotates the text box with the text as it supposed to. Rotating the same text box with corner modifiers rotates only the box while text inside stays horizontal and after rotation bounding box of a rectangle resets instantly. I see that as an inconsistency to say the least.

I guess, there's lots going on in object behavior after introducing basic shapes! :)

Egor, ah, i didn't realise Free transform tool could be used as main transformer =) Tho it's still technically applied to bounding box of an object. But in the end the muscle memory and work patterns are all that matters, it's very hard to change all those hard wired behaviors and create new work patterns.

Regarding coin picture — tho i couldn't find what combination of combining and compounds really makes objects behave like that as a group, i've been almost sure there's a way to make those behave normally. Sure i can simplify a lot in those objects but the way that group made is a result of some design process, and usually i tend to keep all the objects as redactable as possible to be able to easily change the design if needed. The point is, as you say, groups shouldn't behave differently in the first place and compounds shouldn't lose bbox orientation with any slightest rotation (until they made to do so)

I hope the issue could be solved. Thanks!

Responding to Egor — yes, if this happens to me again, I can be sure to save a file with the problematic object. I guess I mistakenly figured the engineers would know how their own software works and would eliminate the ability of the bounding box to become detached from the transformations of objects. The problem is that this behavior comes and goes, so I don't know when I'll experience it next, or how I can force it to happen.

Yeah, thanks!
You know, looking at how it behaves (all is true) I don’t think I should want to use the bounding box :) I am just fine with hitting E to access Free Transform tool which is *almost* works like the bounding box, but easier to call and glitches less.
I use Scale, I use Rotate, some other tricks.
The only case for me to turn the BBox is to resize an area type text :)

Regarding the issue... I made some experiments with these shapes.
I took a coin’s top face (a compound path) and rebuilt it: applied Exclude, Ungroup, Uncompound and Compound back. The result looks the same, but gets rotated with bbox just fine... until you rotate it with Rotate — this seems to reset the bbox immediately.
Once rotated with Rotate, the bbox always get reset on rotating a compound path. And if a group has a rotated-with-Rotate compound path in it, it has the same problem.

What a nonsense.
Thank you all for raising this up!

Egor, i made a sample file, hope that will help.

Frankly, i can't imagine the way to work with illustrator without using bounding boxes — it's the main tool to operate with any object, you can't do most transformations without using bounding box :)

Serge, Dan, everybody — can someone here share a test file for the developers to look at? 7 users, not a one file to dissect. It does not have to be the whole project you are working at, just that piece which glitches out!

I’d certainly provide it myself, if I had one, but I just don’t use bounding box at all, and have no idea if it gets reset or not. I will try to catch it though too.

I've experienced this but for a long while, in different variants. First it was about compound objects while using rotate tool (somehow rotating with rotate modifiers didn't reset bounding box), now it's about groups too. Absolute nightmare to work with.

I've got the same bug on Windows 10, Illustrator 25.2.3
The bounding box doesn't rotate with the object rotation. It seems like it's automatically resetting.

But it works for text though. So strange.

Problem still persists (illustrator v 25.1)

I am using CC 25.0.1 and need to resize a circle from the center along a diagonal line and cannot do it. When I rotate the circle so that the anchor points (and I was hoping bounding box) match the diagonal line, the bounding box automatically resets. This did not happen for me in CS5. If I change the circle into an oval and rotate, then the bounding box rotates as well. But for a perfect circle, which I need to retain, I cannot scale in the direction I need.

Mac os 10.14.6, Illustrator 24.2 (but the problem persist for a while, probably since basic shapes were introduced, but i'm not sure)

Bounding box of any compound path composed from any number of shapes or freehand paths (even just one) being rotated with Rotate Tool (R shortcut) automatically resetting. If compound path constructed of basic shapes only (ellipses, rectangles, etc) and rotation is applied by dragging on a corner rotation widget bounding box behaves normally (aligned with rotaton).

Almost the same with group bounding box with one big difference — bounding box of a group containing any number of basic shapes stays aligned with the group (no matter if i rotate it with Rotation Tool or by the corner rotation widget dragging). When group contains any freehand path any kind of rotation automatically resets its bounding box.  

My actions step by step: pen tool, draw a path freehand, draw second path freehand, selected both paths with Selection tool (shortcut V), made compound path (shortcut cmd-8), select Rotate tool (shortcut R), rotate random angle, select again with Selection tool — bounding box looks as if it been reset. (Screenshot 2020-06-30 16.03.17)

If i rotate this compound path not with Rotation tool (R) by dragging on the corner (that with little arched arrow modificator) boudning box will look aligned with rotation, as it supposed to. (Screenshot 2020-06-30 16.03.26)

But if i use Rotaton tool (R shortcut) after that even once bounding box will be immediately and permanently reset.

Damn' that's annoying! "reset bounding box" does not fix it. Completely spoils my workflow and has now cost me several hours of wasted time. Running 24.03 in macOS 10.15.3 on a 27'' 2017iMac.
Oh yeah - the bug "spills over" and is now also present in v23.
- just uninstalled all versions, deleted the prefs in "Library/application support" and "User/Library/application support", then reinstalled. No change.