I stumbled upon this issue too when working on a Bootstrap (3) child theme. The solution was to change a CSS value for the img-responsive class.
The exact value that breaks this for img-responsive in bootstrap 3 is:
.img-responsive {
display: block;
....
}
when I add
.editor_atto_content .img-responsive {
display: inline-block;
}
It all works again.
In bootstrapbase .img-responsive was copied into bootstrap core less files in this commit, but the display:block value was left out.
Thanks to this thread and the work of Simon Lewis I was able to add a quickfix for this.
I guess the real issue is something weird with atto's image editor JavaScript in:
lib/editors/atto/plugins/image/yui/src/button/js/button.js
But I have not been able to track down the issue there.