This is not actually a bug, this is intended behaviour.
There are two ways to link to an entity from within text: ‘mentions’ or ‘linked highlights’.
If you create an entity directly from highlighted text, you are creating a mention, which is equivalent to using # to mention an existing item.
The name of the entity is the text of the mention (and vice versa!) so if you edit the entity’s name then the ‘mention’ text changes, and if you delete the entity, the text will be lost.
Alternatively, you can highlight text and link to an existing entity. This creates a linked highlight, which behaves somewhat like a traditional reference/footnote - editing the entity does not affect the highlighted text, and deleting the entity just removes the reference without affecting the original text.
Admittedly, it is much easier to create an entity from scratch by using the mention method, compared with the two-stage process required for a linked highlight (create the entity and then reference it).
We are thinking about ways to make the distinction clearer and ways to make linked highlight entity creation simpler.
