Guys, did as you said. The insert image/gallery works fine, just when you click to focus on the editor to put stuff where you want, whatever you have checked gets unchecked, which by default for a gallery means insert all (and for single inserts none). To see this, click on few images and immediately click on insert 'a gallery' button (do NOT click on the editor). Update and preview and it will work as expected. Now, go to HTML view, and for a filtered gallery you will always see something like this:
[gallery include="599,600,601" link="file" linkclass="thickbox"]
The include parameter contains the ID's being shown for a given gallery. When the insert all issue is happening to you, the code inserted is something like this instead:
[gallery link="file" linkclass="thickbox"]
Which by default are all post attachments.
What the dev needs to fix is an usability issue. When the focus is lost from the file-gallery, do not reset the checkboxes state.