P: Editing and then updating smart objects with mask mishandles the smart liquify effect.
With every new version Photoshop get a new bug for liquify and smart objects.
This time when you editing and save/update smart object witch have mask it mishandles the smart liquify effect. So you have to disable the mask before editing it.
Same thing happens if you enter to edit liquify. You have to disable the mask, otherwise its distorted.
