I was beginning to think I was perhaps imagining things

so I set up a little test to see if I could prove I was right.
I first made sure that v17.0 and v12.20b+1 had the same settings.
So in Advanced\Configuration\Search\Miscelaneous the only ticked boxes were "Continue Find at End of File", "Find Next/Prev finds selected text (not last searched for text)", "Set focus...." and in v17 only "Fill search in columns....".
In Find, "Close this dialog after find" in v17.
In Replace in Files, "List Changed files" and "Search subdirectories".
I created two files called test1.txt and test2.txt. Both of them contain ten lines:
abc
def
abc
def
abc
def
abc
def
abc
def
I opened test1.txt and performed the following steps with the following results:
1. cntrl-F, type
abc in Find What box, Next -----> abc in line 1.
2. F3 -----> abc in line 3.
3. F3 -----> abc in line 5.
4. Select
def in line 6.
5. Replace in Files,
def is already in Find What, type
ghi in Replace With, Replace All.
6. Click anywhere in file so nothing is selected, F3.
After the last step, v17.0 opens a window saying "Search string 'def' not found" and v12.20b+1 goes to
abc in line 7.
QED.