Glad to hear you are liking it!!
That sounds like a bug, let me try to investigate what might be happening..
Having said that, I have a much easier workflow for you if you are doing this often:
Go to the Modify Format dialog as you are doing, and SAVE your settings as a preset, and give it a nice name, like "Remove Blanks".
Ok now copy your clip to the clipboard, and go to where you want to paste it, and hit Ctrl+Alt+Q to bring up quick paste menu,
then hit T for "Formatting Presets" submenu, and choose your saved preset "Remove Blanks", and it should do the action and then paste it in your target app.
Notes:
1. This won't change the clip in CHS
2. This can also be used to change text in place -- so you can go to your text editor, select some text, and then do Ctrl+Alt+Q and select the transformation and it will first copy the clip, then transform it, then paste it over original. This is the fastest way to change text in place.