I am using 2023.5.1 version this all of sudden started happening to me today. It is extremely frustrating since I am trying to create a "Just Show Me How" video. And, well, I can't show anyone how when the App doesn't work as it should. I have included the PSD but I realize this is probably a setting on my computer that I changed while writing instructions. Therefore, ti would not work the same on anyone else's.
Some of the settings I was working with were Preferences > General > Skip Transfor when Placing and Use Legacy Free Transform.
I solved my problem. After a reboot, I realized I had saved, and been using, a New Document Preset with a transparent background. When I started with the standard Print > Blank Document > Letter the problem did not occur. I created a new saved preset with white background. No problem.
Just to make it more interesting if you delete the white background, then again you can't delete the image. Weird.
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