I also want to know.
That makes problem a lot.
Hello,
First case: there is no possibility that the plugin adds text watermark if it is set to image only. There is hovewer one thing I can think of. If you uploaded the image and it had text watermark applied, then you removed it and uploaded the same image with image watermark only, the browser displays the old previously loaded image because it has the same name and is cached in the browser. I had the problem while testing this plugin, cache cleaning or simply ctrl+f5 to force reload all resources helped. As I said, if you upload completely new image there is no possibility to apply text when it is set to apply image watermark only.
Second problem: phisically there is no possibility to apply watermark after the plugin was deactivated because no plugin code is executed (wordpress doesn’t load the plugin files at all). Also when it is removed, it cannot work since the code to add watermark is not there! Again, maybe you tried to upload some images which was previously uploaded and then deleted? Browser cache can make a lot of problems…
If my suggestion won’t solve your problem please try to write more about your environment (wordpress version, other plugins installed, etc.)