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@socialsparkmedia thank you for reporting the issue. Please use the list view of the Media Library and click the “Edit or Replace” link under the media file you want to replace, and use the Edit screen’s Media Replace meta box there.
The Media Replace metabox in the grid view was meant for the Pro version of ASE I am building, and I forgot to completely disable it in the free fersion, which I’ll do in the next release.