You aren’t doing anything wrong here — this looks like a bug affecting the live preview for mouse over interactions. I was able to reproduce this and I’ve reported the issue to our interactions team. We’ll dig into the root cause here and I’ll post back with more info when I have it.
I’m having the same problem.
However - it just got worse and now I can’t turn the Live Preview mode on at all.
Interactions don’t show at all on the front end
In the recording you provided, though, it looks like the interaction has been disconnected from any element or class. If you right click the rotate animation, you can choose Change target and select the element. Once the animation has been bound to an element/class the live preview should activate as expected.
the rotate transition does not rotate. It shrinks and enlarges instead.
It looks like the div is rotating, but is doing so along the Y axis so you are seeing the expected behavior (makes it look like it’s shrinking). Try rotating it along the Z-axis and you may get the behavior you are expecting