To reproduce this bug on a clean install with Media 7.x-2.x-dev:

1. Create a new node.
2. Embed an image with the "teaser" view mode.
3. Click the image in WYSIWYG. You'll see it's wrapped in an ANCHOR element.
4. Click the media button again. This normally allows you to change the view mode and other fields for the image. Instead, you'll be given a new popup for a new media embed.