Thanks for the reply Vessy. We currently have a mature CMS that heavily uses Telerik controls. The Telerik version we use for the CMS version that the problem exists in, is 2011.2.915.40. The steps to reproduce the problem in our CMS is:
1. Open the rich text editor to edit page content.
2. Place the cursor next to some header text, press the enter key to go to the next line.
3. Insert an image. The image will not appear, until the html tab, then the design tab are pressed.
I could not reproduce the issue with the link you provided. http://demos.telerik.com/aspnet-ajax/editor/examples/filemanagers/defaultcs.aspx. Could it be the version of Telerik that is causing the issue?