Why do my Illustrator Smart Objects distort in PS when I press Apple T?

Hi All,
I am placing a linked Illustrator file onto a Photoshop document.
I position the smart object and pressed enter.
Then I decide I would like to further enlarge and rotate the smart object slightly. When I press Apple T (to transform) it juest distorts.
Why is this happening please?
Correct image:
Distortion when I press Apple T to enlarge or rotate object slightly
Any help would be greatly appreciated,
Many thanks,
Ben

It seems the object scales to fill the art board it contains. Cropping the art board to the artwork bounds solves this problem.

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