Failure understand build.settings and Orientation

I think I am missing something with the build.settings and how it is supposed to work.

I have built a simple app to test out orientation change. If I have no build.settings file, everything works as planned. The object rotates properly and my text aligns below the object as planned.
As soon as I add a build.settings, I get a different result.
Can anyone explain why I get what I do?

Please watch this video to better explain what I am getting at.

http://www.screencast.com/t/0z4nW1HS4 [import]uid: 13814 topic_id: 23997 reply_id: 323997[/import]