Win10, Win7, Mac OS Sierra
Broken: 2.78a e8299c8 , 2.66.0 r54697
Short description of error
When a joint (for example, an arm) is bent, paint weight is not enough to express deformation around the joint. So it's a common practice to add a shape key for the bent shape and edit it.
But when you enter edit mode and select polygons to edit it, the manipulator is on wrong position.
Exact steps for others to reproduce the error
Just select faces. Manipulator is supposed to sit on the selected faces but it's not.