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diff --git a/UnityProjects/MRTKDevTemplate/Assets/Prefabs/BoundsControl/ScaledBoundingBoxWithTraditionalHandles.prefab.meta b/UnityProjects/MRTKDevTemplate/Assets/Prefabs/BoundsControl/ScaledBoundingBoxWithTraditionalHandles.prefab.meta
new file mode 100644
index 000000000..01e518b0e
--- /dev/null
+++ b/UnityProjects/MRTKDevTemplate/Assets/Prefabs/BoundsControl/ScaledBoundingBoxWithTraditionalHandles.prefab.meta
@@ -0,0 +1,7 @@
+fileFormatVersion: 2
+guid: 728f720d1417fae41a8c8a820e4523fa
+PrefabImporter:
+  externalObjects: {}
+  userData: 
+  assetBundleName: 
+  assetBundleVariant: 
diff --git a/UnityProjects/MRTKDevTemplate/Assets/Scenes/BoundsControlRuntimeExample.unity b/UnityProjects/MRTKDevTemplate/Assets/Scenes/BoundsControlRuntimeExample.unity
index d29c3829c..533940755 100644
--- a/UnityProjects/MRTKDevTemplate/Assets/Scenes/BoundsControlRuntimeExample.unity
+++ b/UnityProjects/MRTKDevTemplate/Assets/Scenes/BoundsControlRuntimeExample.unity
@@ -1485,9 +1485,7 @@ MonoBehaviour:
   m_EditorClassIdentifier: 
   statusText: {fileID: 414943981}
   darkGrayMaterial: {fileID: 2100000, guid: 4b78d3a2e1ab7c0499ce81ca8d18e7b5, type: 2}
-  redMaterial: {fileID: 2100000, guid: db61b94b23e5fb444b86c231d13e46ef, type: 2}
-  cyanMaterial: {fileID: 2100000, guid: 0c3570eeff29ef44e9fed596a4cc3ffd, type: 2}
-  boundsVisualsPrefab: {fileID: 5671351296789090341, guid: ecbf05ce2121a744cb893e82377ba3cd, type: 3}
+  boundsVisualsPrefab: {fileID: 4749112585544339608, guid: 728f720d1417fae41a8c8a820e4523fa, type: 3}
   cubeParent: {fileID: 1321897323}
 --- !u!4 &1886794917
 Transform:
diff --git a/UnityProjects/MRTKDevTemplate/Assets/Scripts/BoundsControlRuntimeExample.cs b/UnityProjects/MRTKDevTemplate/Assets/Scripts/BoundsControlRuntimeExample.cs
index 6609ba291..9f0530f0d 100644
--- a/UnityProjects/MRTKDevTemplate/Assets/Scripts/BoundsControlRuntimeExample.cs
+++ b/UnityProjects/MRTKDevTemplate/Assets/Scripts/BoundsControlRuntimeExample.cs
@@ -24,12 +24,6 @@ public class BoundsControlRuntimeExample : MonoBehaviour
         [SerializeField]
         private Material darkGrayMaterial;
 
-        [SerializeField]
-        private Material redMaterial;
-
-        [SerializeField]
-        private Material cyanMaterial;
-
         [SerializeField]
         private GameObject boundsVisualsPrefab;
 
diff --git a/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/BoundsHandleInteractable.cs b/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/BoundsHandleInteractable.cs
index 7fc49206c..2d5248591 100644
--- a/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/BoundsHandleInteractable.cs
+++ b/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/BoundsHandleInteractable.cs
@@ -91,6 +91,8 @@ public BoundsControl BoundsControlRoot
 
         private float initialParentScale;
 
+        private float initialLocalScale;
+
         /// <inheritdoc/>
         protected override void Awake()
         {
@@ -110,6 +112,7 @@ public void Start()
             // Record initial values at Start(), so that we
             // capture the bounds sizing, etc.
             initialParentScale = MaxComponent(transform.parent.lossyScale);
+            initialLocalScale = MaxComponent(transform.localScale);
         }
 
         /// <summary>
@@ -129,11 +132,12 @@ protected virtual void LateUpdate()
             }
 
             // Maintain the aspect ratio/proportion of the handles, globally.
+            // Setting localScale to ensure that lossyScale remains equal to initialLocalScale across all axes. 
             transform.localScale = Vector3.one;
             transform.localScale = new Vector3(
-                transform.lossyScale.x == 0 ? transform.localScale.x : (1.0f / transform.lossyScale.x),
-                transform.lossyScale.y == 0 ? transform.localScale.y : (1.0f / transform.lossyScale.y),
-                transform.lossyScale.z == 0 ? transform.localScale.z : (1.0f / transform.lossyScale.z));
+                transform.lossyScale.x == 0 ? transform.localScale.x : (initialLocalScale / transform.lossyScale.x),
+                transform.lossyScale.y == 0 ? transform.localScale.y : (initialLocalScale / transform.lossyScale.y),
+                transform.lossyScale.z == 0 ? transform.localScale.z : (initialLocalScale / transform.lossyScale.z));
 
             // If we don't want to maintain the overall *size*, we scale
             // by the maximum component of the box so that the handles grow/shrink
diff --git a/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithHandles.prefab b/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithHandles.prefab
index 26c94e14a..50eb7dbb7 100644
--- a/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithHandles.prefab
+++ b/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithHandles.prefab
@@ -64,15 +64,15 @@ PrefabInstance:
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       propertyPath: m_LocalScale.x
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+      value: 1
       objectReference: {fileID: 0}
     - target: {fileID: 1881740777175929026, guid: 45938efb25451774cad2262df8ebeef2, type: 3}
       propertyPath: m_LocalScale.y
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+      value: 1
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     - target: {fileID: 1881740777175929026, guid: 45938efb25451774cad2262df8ebeef2, type: 3}
       propertyPath: m_LocalScale.z
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+      value: 1
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       propertyPath: m_LocalPosition.x
@@ -157,15 +157,15 @@ PrefabInstance:
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       propertyPath: m_LocalScale.x
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       propertyPath: m_LocalPosition.x
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+      value: 1
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+      value: 1
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+      value: 1
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       propertyPath: m_LocalPosition.x
@@ -352,15 +352,15 @@ PrefabInstance:
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+      value: 1
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+      value: 1
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+      value: 1
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diff --git a/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithTraditionalHandles.prefab b/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithTraditionalHandles.prefab
index d813d9929..17fc780a8 100644
--- a/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithTraditionalHandles.prefab
+++ b/org.mixedrealitytoolkit.spatialmanipulation/BoundsControl/Prefabs/BoundingBoxWithTraditionalHandles.prefab
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