Insert still uses absolute paths when "Use absolute paths" is unchecked

I have 7.x-2.4+9-dev installed and it appears that the insert feature ignores the "Use absolute paths" setting and still inserts absolute paths, even when the setting is unchecked. Removing the path after inserting is not a big deal, but it would be great to figure out how to remedy this.

Edit: To clarify, this only happens when I insert a colorbox version of the image -- the setting is respected with all non-colorbox inserts.