If you are selecting a local file in Step 2 you are not downloading anything so Step 1 is (correctly) blanked. If you reselect something in Step 1 you are no longer using a local file so the previously selected item in Step 2 is (correctly) blanked.
No bug here to be fixed
Ah ok. The method behind the madness.
Thanks for pointing that out to me.
It all makes sense now