Its a trivial matter for apps like these to *copy* a photo and then work on the *copy*. Thats what we do when we do this on our desktops. We dont risk the original image.
If you have no use for or dont value the original image, then not having it after editing isnt a problem. But there is no excuse for an editing app to destroy the original.
If this app ever changes this, Ill update my review.
PhoneGui about Circular Tiny Planet Editor