Problems with "Local Scale Selection" basic streamline tool.

While blocking out this cog, I encountered a problem with the Subobject Tools->Local Transform->Local Scale Selection# (nmb) basic streamline tool. If I scale the selected elements on local Y axis, two of them get twisted at an odd angle.

I'm attaching a model with which you can reproduce the issue.
Depending on the mouse button (or nmb) the tool is attached to, distortion may occur on different parts of the selection.

Try this
http://www.digitalfossils.com/Download/NVil-Oct-15-15.rar

Wow, this was fast!
It looks good, thank you.