I found the problem.
The **** key was not remaning set.
I had to tap the shift key twice to get it to remain set
Hi True Seeker
Give this a try.
The Organizer Tab is active and you see thumbnails of your images in the Organizer.
Background image on video track 1, with its image showing in the Edit Mode Monitor.
Highlight the Background Image on video track 1.
Holding down on the Shift Key, click and drag the Organizer thumbnail image that you want to insert into the Background from the Organizer to the Edit Mode Monitor (DO NOT LET UP ON HOLDING DOWN THE SHIFT KEY). When you are in the Edit Mode Monitor (still holding down the Shift Key), a drop down menu will appear. Select "Picture in Picture" from that menu. Only after you see the picture inserted in the Background Image then release the mouse. Afterwards, you can double click the picture in the Background to get its bounding box whose corners you can use to size and position the picture in picture.
The above can be done in the Timeline or Sceneline view.
Did you ever take a look at the possibilities for Picture in Picture (aka PiPs) found Effects/Preset/PiPs?
Please let me know how that turns out.
Glad that you found your issue. I hate when a key sticks and is not supposed to, or the effect of the key doesn't stick, when it should...
Personally, I find that for PiP work, manually Keyframing the fixed Effects, Motion>Scale and Motion>Position give me such complete control, but I am a control freak. Also, I can easily animate these (plus others) over time and can adjust the Velocity that the Effects happen.
Good luck, and happy editing,
Select the clip in organizer then press shift drag and drop in monitor window. Select the picture in picture option in context menu.