Not sure if this is a bug or I'm doing something wrong. Same issue in 1.2.3 and 1.2.4.

1. Create additional Admin with access to one Album under "Managed Albums" and no extra rights assigned.
2. The new admin user logs in, clicks Admin under Toolbox. Then clicks save.
3. They no longer have access to the Album that was assigned to them.

Any ideas?

It is a bug. Thanks for reporting. Fix will be in tonight's nightly build.