The best way I can describe this bug is to show it.
It should look like this:
"What's the matter with you?"
It looks like this:
"
What’s the matter with you?"
When I backspace before What’s, the " disappears. When I type another " in front of What’s, it looks like this:
"
"
What’s the matter with you?"
This only happens some of the time but is very frustrating. I don’t know why it randomly happens.
Also, if I type U.N. or U.S. Scrivener thinks it is the end of a sentence and capitalizes the next letter.
Could you please post a screenshot of your ruler settings when this happens? Smart quotes are handled by the OS X text system, and no one else has reported anything like this in the three years Scrivener has been using that code, so the most likely explanation is something that needs tweaking in your ruler settings.
As for “U.N.” and suchlike, yes, Scrivener will think the period is the end of a sentence. Just hit cmd-Z as soon as the first letter is capitalised and then carry on typing to get rid of the capitalisation. You will see the same issue in most programs that have auto-capitalisation, including Pages (in Word it doesn’t auto-cap after known abbreviations, but then it won’t auto-cap even when they are at the end of a sentence either). Unfortunately software is still “dumb” and has no way of knowing all the vagaries of the language used.