Hello,
it seems like Publisher is automatically rotating an image after it is converted to a picture frame, but only if the image got rotated before the conversion. Here are steps to reproduce the issue:
Place an image.
Rotate the image by some amount.
Right click the image and choose "Convert to picture frame".
Expected behavior: Image is converted to picture frame without moving/rotating the image.
Observed behavior: Image is rotated by same amount as in step 2 within picture frame.
Kind regards