The Live Resize feature is meant as a verification for setting the resizable hierarchy correctly for your widget. It clones your selected widget, group, or window, and puts it and the children into a resizable window, so you can verify that only the widgets you want to resize actually *do* resize.
If you want to resize your window permanently in the design process, you will find a menu item in the main window in the Layout menu: "Synchronizes Resize". Check that box, and the window will behave the way you expect. Uncheck the box, and the window resizes independently again.
I know that this is not ideal by GUI standards, but at least the functionality is there.
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