I am trying to embed a tileset via the button at the bottom and it isn’t working for me correctly. It works if I create a new tileset and check the box for it but I’d rather not create a new tileset each time.
I’ve afraid you’re running into a bug I still need to look into (at least, if you’re running into this on 1.9.2). I currently don’t know if there’s a workaround, but chances are that the bug is a regression and that downgrading to the latest Tiled 1.8 would help.