I use C-r constantly. But sometimes I need to find a command, and then edit it before running it. What is the proper way to exit "search mode" and go into the normal "edit" mode?
It's so ingrained I had to actually do it in a shell to know what it was I did.
I can't replicate it now on my test box; it works exactly the way you say it should. It may be a terminal issue; I'm currently on Windows using cygwin to ssh to Linux.