I don't recall this behavior when we last used this to flatten a DWG.
Attached is the SKP file with the Original DWG Component on the Left and the Box Scaled DWG Component on the Right. When i click into the Scaled Component and try to enter the Trash Can Component (Circled in Red) the whole Component jumps to a different location as though the Axis is Changed. Also there is no Z axis shown in the scaled Component. Any Idea on why this happens? Our Workaround was to use Flatten to Plane from Eneroth. But this requires going into the individual Sub Components and Flattening. We don't want to Explode Everything and we want to keep the DWG Layers intact.
FYI: Here is the link to a post about different ways of flattening a Component via the Sketchup Forum.
John (Vander, Zvan2000)