The issue is reproducible on demo page: http://demos.telerik.com/kendo-ui/editor/inline-editing.
Open image browser, create a folder - loading animation is persisting.
To workaround the issue I added the code below to execute handler. But it would be nice to have the issue fixed in Kendo UI.
execute: function (e) { else if (e.name == "insertimage") { $timeout(function () { var imagebrowser = $("[data-role=imagebrowser]").data("kendoImageBrowser"); imagebrowser.dataSource.bind("requestEnd", function() { kendo.ui.progress($("body"), false); }); }); } }