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this is because cat drawing is set to use billboard mesh and avatar uses the plane. you can alt-click the drawing in the editor and select a different mesh type in 3d settings panel, under mesh tab
arrow keys rotating the camera is not intended behavior, it's on the todo list for getting fixed!

Ah, I hadn't noticed those were options. I tried the different types, and they seem to offer a wide set of options. The transform options allow for some effects not found in 2D Bitsy. I also found the camera type options and played with those.

I had just started typing a comment about transparency when I found the option for that as well.