Live corners disappear after scaling shape

The Live Corners feature is welcome in Illustrator 17.1, but I find that it works inconsistently. One issue that I've isolated is that scaling a path makes the live corners disappear.
To reproduce:
Create a rounded rectangle
Select the path
Click the direct selection tool to verify that Live Corners are present
Click the selection tool
Scale the rounded rectangle (say drag up from the scale point in the middle of the bottom side)
Click the direct selection tool - where are the live corners?
Is that a bug? Is that a design choice?

I'm trying to use live corners, but I too get the shape scaled incorrectly . If I create a square and create rounded corners with the DS arrow, that's fine. but if I want to make the square a rounded rectangle, the live corners distort. This is the same behavior as the rounded rectangle tool. it only keeps the "Live Corners" live if you scale it proportionally. I thought the reason to have a feature called LIVE CORNERS was to keep corners LIVE-even after scaling. The Stylize filter works better at this. Am I missing something? I hope so, because Photoshop does rounded corners better this. I thought the whole reason for the "live corners" was to FINALLY have this available in Adobe's main vector-drawing tool, Illustrator. Maybe this feature is not fully realized.

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