Is this a known bug? Couldn’t find anything refering to it.
Looks like a css image clipping error…
The WYSIWYG editor is not XHTML compliant, so if you have an XHTML DOCTYPE defined in your design, the editor will break. There is a workaround for IE (to put the <?xml> declaration first, which sends IE into quirks mode), but this doesn't work for Mozilla-based browsers. Other Matrix users have created specific designs for the front-end editing mode that do not have the DOCTYPE declaration. The editor then works properly.
I believe we are working on a proper fix for this, but I'm not sure how far along that is.
What is the magic doctype to declare to make it work?
it's early days in the design aspect of the project so it shouldn't be a problem makeing the page meet the new doctype requirements.
You have to drop the doctype to make it work