Odd behaviour when overriding textures in the Editor

I’m trying to overwrite an existing texture in the project with a smaller size version. When I drag the texture to the asset window, it looks it does overwrite the existing image only to resize it back to the original size.

It looks like it is related to the POT option in the asset tasks as when I disable it, it doesn’t attempt to resize it after the overwrite.

Yeah me too (both problem and tong’s solution)- confused me for a while lol.