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This is normal - 3ds max gives you warning/reminder that xform operation is destructable, but this is expected behaviour. Should you proceed, the xform operation will take effect.
when ever i collapse a editable poly object with XForm it gives following warning and does not work.
Warning: this will remove everything in the stack of all selected objects, including creation parameters and any animation applied to creation or modifier parameters.
This is normal - 3ds max gives you warning/reminder that xform operation is destructable, but this is expected behaviour. Should you proceed, the xform operation will take effect.
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