Steps to reproduce:

Make sure the model is using local coordinates
Create a cube

Using the window to change the rotation of the cube, update the text box to rotate X coordinate 45 degrees and press enter to rotate the cube. Note that the handles for moving/resizing the cube haven't changed orientation.

Drag the handles to move the cube. The object will move in the local space relative to its original orientation. As soon as you let go of the mouse, the handles will change to reflect the correct local orientation.