In Max you can select the object itself, or any of its sub-components (vertex/edge/face/poly). Object level is the object itself, sub-object level is one of the sub-components. The issue of Scaling objects (at the object level) causing innumerable problems (both inside and outside Max) is well known and should be avoided at all costs.
The fact that a Reset XForm fixed it pretty much confirms the cause of your problem.
Max 2016 (SP1/EXT1)
Win7Pro x64 (SP1). i5-3570K @ 4.4GHz, 8Gb Ram, DX11.
nVidia GTX760 (2GB) (Driver 430.86).