diff --git a/Engine/source/T3D/SceneGroup.cpp b/Engine/source/T3D/SceneGroup.cpp
index 08195b976..127b5e069 100644
--- a/Engine/source/T3D/SceneGroup.cpp
+++ b/Engine/source/T3D/SceneGroup.cpp
@@ -164,9 +164,8 @@ void SceneGroup::setTransform(const MatrixF& mat)
    Parent::setTransform(mat);
 
    // Calculate the delta transformation
-   MatrixF deltaTransform;
-   oldTransform.inverse();
-   deltaTransform.mul(oldTransform, getTransform());
+   MatrixF deltaTransform = mat;
+   deltaTransform.mul(oldTransform.inverse());
 
    if (isServerObject())
    {
@@ -178,11 +177,19 @@ void SceneGroup::setTransform(const MatrixF& mat)
          SceneObject* child = dynamic_cast<SceneObject*>(*itr);
          if (child)
          {
+            // Get the child's current transform
             MatrixF childTransform = child->getTransform();
-            MatrixF relativeTransform;
-            relativeTransform.mul(deltaTransform, childTransform);
-            child->setTransform(relativeTransform);
-            child->setScale(childTransform.getScale()); //we don't modify scale
+
+            // Apply the delta transformation (ignoring scale)
+            MatrixF updatedTransform = childTransform;
+            updatedTransform.mul(deltaTransform);
+
+            // Update the child's transform
+            child->setTransform(updatedTransform);
+
+            PhysicsShape* childPS = dynamic_cast<PhysicsShape*>(child);
+            if (childPS)
+               childPS->storeRestorePos();
          }
       }
    }
@@ -196,9 +203,8 @@ void SceneGroup::setRenderTransform(const MatrixF& mat)
    Parent::setRenderTransform(mat);
 
    // Calculate the delta transformation
-   MatrixF deltaTransform;
-   oldTransform.inverse();
-   deltaTransform.mul(oldTransform, getRenderTransform());
+   MatrixF deltaTransform = mat;
+   deltaTransform.mul(oldTransform.inverse());
 
    // Update all child transforms
    for (SimSetIterator itr(this); *itr; ++itr)
@@ -206,11 +212,19 @@ void SceneGroup::setRenderTransform(const MatrixF& mat)
       SceneObject* child = dynamic_cast<SceneObject*>(*itr);
       if (child)
       {
-         MatrixF childTransform = child->getRenderTransform();
-         MatrixF relativeTransform;
-         relativeTransform.mul(deltaTransform, childTransform);
-         child->setRenderTransform(relativeTransform);
-         child->setScale(childTransform.getScale()); //we don't modify scale
+         // Get the child's current transform
+         MatrixF childTransform = child->getTransform();
+
+         // Apply the delta transformation (ignoring scale)
+         MatrixF updatedTransform = childTransform;
+         updatedTransform.mul(deltaTransform);
+
+         // Update the child's transform
+         child->setTransform(updatedTransform);
+
+         PhysicsShape* childPS = dynamic_cast<PhysicsShape*>(child);
+         if (childPS)
+            childPS->storeRestorePos();
       }
    }
 }
diff --git a/Templates/BaseGame/game/tools/worldEditor/scripts/interfaces/subSceneEditing.tscript b/Templates/BaseGame/game/tools/worldEditor/scripts/interfaces/subSceneEditing.tscript
index 435f88b4d..70cf643ba 100644
--- a/Templates/BaseGame/game/tools/worldEditor/scripts/interfaces/subSceneEditing.tscript
+++ b/Templates/BaseGame/game/tools/worldEditor/scripts/interfaces/subSceneEditing.tscript
@@ -1,33 +1,28 @@
 function SubScene::onSelected(%this)
 {
-   echo("SELECTED SUBSCENE");
+   EWToolsPaletteWindow.clearButtons();
+
+   //Adds a button to the pallete stack
+   EWToolsPaletteWindow.addButton("Select", "ToolsModule:arrow_n_image", "EWorldEditorNoneModeBtn::onClick();", "", "Select Arrow", "1");
+   EWToolsPaletteWindow.addButton("Move", "ToolsModule:translate_n_image", "SubSceneMoveModeBtn::onClick();", "", "Move Selection", "2");
+   EWToolsPaletteWindow.addButton("Rotate", "ToolsModule:rotate_n_image", "SubSceneRotateModeBtn::onClick();", "", "Rotate Selection", "3");
+   EWToolsPaletteWindow.addButton("Scale", "ToolsModule:Scale_n_image", "EWorldEditorScaleModeBtn::onClick();", "", "Scale Selection", "4");
    
-   %moveButton = EWToolsPaletteWindow.findButton("Move");
-   %rotateButton = EWToolsPaletteWindow.findButton("Rotate");
-   
-   %moveButton.originalCommand = %moveButton.command;
-   %moveButton.command = "SubSceneMoveModeBtn::onClick();";
-   
-   %rotateButton.originalCommand = %rotateButton.command;
-   %rotateButton.command = "SubSceneRotateModeBtn::onClick();";
-   
-   EWToolsPaletteWindow.addButton("SubSceneMove", "ToolsModule:translate_n_image", "SubSceneChildMoveModeBtn::onClick();", "", "Move SubScene + Children", "1");
-   EWToolsPaletteWindow.addButton("SubSceneRotate", "ToolsModule:rotate_n_image", "SubSceneChildRotateModeBtn::onClick();", "", "Rotate SubScene + Children", "2");
+   EWToolsPaletteWindow.addButton("SubSceneMove", "ToolsModule:translate_n_image", "SubSceneChildMoveModeBtn::onClick();", "", "Move SubScene + Children", "5");
+   EWToolsPaletteWindow.addButton("SubSceneRotate", "ToolsModule:rotate_n_image", "SubSceneChildRotateModeBtn::onClick();", "", "Rotate SubScene + Children", "6");
    
    EWToolsPaletteWindow.refresh();
 }
 
 function SubScene::onUnselected(%this)
 {
-   echo("UN-SELECTED SUBSCENE");
-   EWToolsPaletteWindow.removeButton("SubSceneMove");
-   EWToolsPaletteWindow.removeButton("SubSceneRotate");
-   
-   %moveButton = EWToolsPaletteWindow.findButton("Move");
-   %rotateButton = EWToolsPaletteWindow.findButton("Rotate");
-   
-   %moveButton.command = %moveButton.originalCommand;
-   %rotateButton.command = %rotateButton.originalCommand;
+   EWToolsPaletteWindow.clearButtons();
+
+   //Adds a button to the pallete stack
+   EWToolsPaletteWindow.addButton("Select", "ToolsModule:arrow_n_image", "EWorldEditorNoneModeBtn::onClick();", "", "Select Arrow", "1");
+   EWToolsPaletteWindow.addButton("Move", "ToolsModule:translate_n_image", "EWorldEditorMoveModeBtn::onClick();", "", "Move Selection", "2");
+   EWToolsPaletteWindow.addButton("Rotate", "ToolsModule:rotate_n_image", "EWorldEditorRotateModeBtn::onClick();", "", "Rotate Selection", "3");
+   EWToolsPaletteWindow.addButton("Scale", "ToolsModule:Scale_n_image", "EWorldEditorScaleModeBtn::onClick();", "", "Scale Selection", "4");
    
    $SubScene::transformChildren = false;