I made a simple modification to the drag and drop example, to handle dragging an object onto a differently scaled one. I manually instantiate the object rather than using AddChild, and set the scale to one before parenting it. The problem I have encountered is that when the object is rotated using quaternions, that it changes shape, despite every value in the inspector being identical to a non rotated child.
As you can see in this example image from the editor, the only different value in the inspector is rotation. If I adjust the scale, it goes back to looking the way it should. Is this a Unity error?