The command "Transform Selection" only affects the selection frame, not the image. Choose the command "Select -> Transform Selection".
To change the horizontal and vertical sizes of a selected area, drag the frame corner. To change either the horizontal or vertical size, drag the frame border. Move only one corner or border by holding down the Ctrl key.
To rotate a selected area, place the cursor close to the frame manipulator either from inside or outside (the cursor will reappear as a two-sided arrow) and drag the cursor in a circular fashion.
To save the changes, click the mouse twice inside the frame or click on the OK button from the Tools Panel or press Enter. To cancel the transformation, click on the Cancel button or press Esc.