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Georererencing strange in ArcMap 10.7.1 ?

Question asked by griner on Jan 9, 2020
Latest reply on Jan 14, 2020 by CBenkelman-esristaff

We upgraded from ArcMap 10.4.1 to 10.7.1. (not ArcGIS Pro, yet.)

In 10.4.1 georeferencing worked by adding the raster (we generally use .tiff files for scanned images) to the map. Then navigating to the general area of where the image would be located. Then clicking on 'Fit to Display' in the Georeferencing toolbar.  We then would add 2 or 3 (maybe 4) control points using 1st Order polynomial (affine). When things look good, we click on 'Update Georeferencing' in the toolbar and ArcMap would write out a .tfwx file for the image. If, at a later date, we needed to re-use the image, all we had to do was add the .tiff file to the map and it would snap back into georeferenced place.

Now, in 10.7.1, the 'Fit to Display' works, the adding control points works, but when 'Update Georeferencing' is clicked, the image is suddenly moved away from where it was linked to (often to locations many hundreds of miles away! - we're usually georeferencing images that cover about a 15-20 square mile area - 4 x 5 sections on a quad map, e.g.). I notice a .tfwx file being written out.  Restarting ArcMap and adding the .tiff file to the map it goes to the location that had nothing to do with the original control point links.  !?!?!

What's the scoop with georeferencing in 10.7.1?  It used to work so nicely before..