When I rotate an object with the rotate tool while my mode is set to world-space rotation, any rotation applied to the object also applies itself to the rotate tool’s handles. The video below illustrates the problem.
Despite being in world-space rotation mode, the handles act as if I am in local space mode.
Expected behavior
After I rotate an object I expect the handles to keep their original orientation.
This behavior is intended because we believe it makes more sense to apply a single world-space rotation and then modify that rotation in local-space afterwards. As a work-around, you can de-select and re-select the instance to apply another world-space rotation.
If you think this behavior should be changed, I encourage you to create a feature request and explain how the changed behavior would improve your workflow.