Component area acting as mask for component elements?

I keep running into this issue after the May update and I'm not sure whether it's working as intended and is just annoying, or if it's a bug.

I recorded a gif to demonstrate but since I don't have it on YouTube or anything, I'll try to just list out the steps to reproduce the issue:

1. Add a rectangle to your artboard. Give it a background color as an example.
2. Command+K on the rectangle (to make it a component).
3. Now that you have a component, Command+click on the rectangle to isolate and select it. Then drag a corner to make the rectangle bigger.

Then observe how it's almost like the original area/size of the component is acting as a mask for the shape . . . no matter what I do I cannot figure out how to resize the rectangle so that the new larger rectangle is all viewable as part of the component, unless I ungroup and regroup the component.

Is that how it's supposed to work?? I hope not. It's unintuitive and a pain to keep ungrouping and regrouping components every time you want to change the content or the size. And resizing the component as a whole will mess with the spacing and alignment of other elements that are part of the component, if there are any.

Thanks in advance for anyone who has ideas on what is happening here!