arcgis desktop - Why is ArcMap editor deleting some added vertices and simplifying polygon?

I am using ArcMap 10.0. I am trying to edit (and add) vertices in a polygon.

I start editing, (using "Edit Vertices" tool), and add many vertices in the polygon.

Then when I am done, I save the changes. But, the image gets simplified and I lose many of the additions!

Why is the editor deleting some vertices and simplifying the polygon?