The steps listed are for Brush Editing Mode, but it seems there's an issue with using Modeling Mode as well (using PolyEd).
- Place a volume (for example a trigger volume, or in my case an audio kinetic spatial audio volume, although the issue seems to occur with any volume that can be brush edited)
- Rotate the volume (for example to align it with existing geometry in a map)
- Enter brush editing mode on the volume
- Select a vertex or selection of vertices
- Notice now how even if the transform gizmo is set to local space, or world space, the vert selection no longer is able to be moved along the local coordinates of the volume itself.
- The same issue seems to be prevalent with edge selection as well, not just for vertices.