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I did a search of the forum messages for this, but apparently it hasn't been raised before.

Select some text, then press F8 (search-replace). When you do this, sometimes the dialog box will come up with Active document checked as the scope, other times with Selected text checked. I don't know what controls this and can't predict it. If Active document comes up checked, you can check Selected text and all will work well. However, if Selected text comes up checked when the dialog box appears, incorrect behaviour can occur as follows. Fill in search and replace strings (e.g. "th" and "cz"). Click on Replace all. The substitution will be made not only in the selected text but throughout the active document, as if Active document were checked as the scope.

I seem to see consistent behavior now, but this could be partially due to how I run TextPad - it tends to remain open all day long, with no restarts. If I have any characters selected - even newlines - it comes up with "selected text" checked; otherwise, it defaults to Active Document.