Using add cover adds an svg wrapped cover image to the epub3, adds the correct cover semantics, add the proper epub3 manifest properties. It passes all epubcheck cover related checks.
My guess is your ADE version is quite old and it probably does not support svg which is a required part of the epub3/html5 spec. Please test with a known epub3 compliant reader such as Thorium.
So no bug. Just an out of date reader that does not properly support svg image scaling.
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