1) Create/open a test that included a coded step
2) Select 3 steps, one of them being the coded step
3) Right click and select "Create test as step"
4) Click OK

Expected: The new subtest to be successfully created and the parent test to reference it.
Actual: "Unexpected error occurred and will be reported to Telerik: Object reference not set to an instance of an object." This stack trace is put into the application log:

[09/25 15:25:26,Telerik.TestStudio.exe(16540:1),TestStudio] TestExplorerController.ExecuteCommand() : EXCEPTION! (see below)
     Outer Exception Type: System.NullReferenceException
     Message: Object reference not set to an instance of an object.
     HRESULT: 0x80004003 (Official ID (if app.) = E_POINTER, Error Bit = FAILED, Facility = FACILITY_NULL, Code = 16387)
     Call Stack:
          at ArtOfTest.WebAii.Design.UI.TestExplorerController.PositionCodedStep(StepViewModel oldStep)
          at ArtOfTest.WebAii.Design.UI.TestExplorerController.ExecuteCommand(ICommand command, Object parameters)

The subtest is created, but contains an extra unwanted coded step. The parent test correctly references the new subtest.