==== bug_update.php#2 (text) ====

@@ -75,11 +75,20 @@
 	$f_close_now					= gpc_get_string( 'close_now', false );
 
 	# Handle auto-assigning
-	if ( ( NEW_ == $t_bug_data->status )
-	  && ( 0 != $t_bug_data->handler_id )
-	  && ( ON == config_get( 'auto_set_status_to_assigned' ) ) ) {
-		$t_bug_data->status = config_get( 'bug_assigned_status' );
-	}
+    if( ON == config_get('auto_set_status_to_assigned') ) {
+        # Bugs that were still in status 'new' and have just had a handler
+        # set should be changed to 'assigned' status.
+        if( NEW_ == $t_old_bug_status && NEW_ == $t_bug_data->status && NO_USER != $t_bug_data->handler_id ) {
+            $t_bug_data->status = config_get( 'bug_assigned_status' );
+        }
+        # Bugs that were still in status 'assigned' and have just had their
+        # handler reset to none should go back into their initial status.
+        elseif( ASSIGNED == $t_old_bug_status && ASSIGNED == $t_bug_data->status && NO_USER == $t_bug_data->handler_id ) {
+            $t_bug_data->status = config_get( 'bug_submit_status' );
+        }
+        
+        # NB: Error cases should be picked up in the validation just below.
+    }
 
 	helper_call_custom_function( 'issue_update_validate', array( $f_bug_id, $t_bug_data, $f_bugnote_text ) );
 

==== core/bug_api.php#3 (text) ====

@@ -1081,25 +1081,33 @@
 		$h_status		= bug_get_field( $p_bug_id, 'status' );
 		$h_handler_id	= bug_get_field( $p_bug_id, 'handler_id' );
 
-		if ( ( ON == config_get( 'auto_set_status_to_assigned' ) ) &&
-			 ( NO_USER != $p_user_id ) ) {
-			$t_ass_val = config_get( 'bug_assigned_status' );
-		} else {
-			$t_ass_val = $h_status;
-		}
+        # Handle auto-assigning
+        $t_new_status = $h_status;
+        if( ON == config_get('auto_set_status_to_assigned') ) {
+            # Bugs that were still in status 'new' and have just had a handler
+            # set should be changed to 'assigned' status.
+            if( NEW_ == $h_status && NO_USER != $p_user_id ) {
+                $t_new_status = config_get( 'bug_assigned_status' );
+            }
+            # Bugs that were still in status 'assigned' and have just had their
+            # handler reset to none should go back into their initial status.
+            elseif( ASSIGNED == $h_status && NO_USER == $p_user_id ) {
+                $t_new_status = config_get( 'bug_submit_status' );
+            }
+        }
 
 		$t_bug_table = config_get( 'mantis_bug_table' );
 
-		if ( ( $t_ass_val != $h_status ) || ( $p_user_id != $h_handler_id ) ) {
+		if ( ( $t_new_status != $h_status ) || ( $p_user_id != $h_handler_id ) ) {
 
 			# get user id
 			$query = "UPDATE $t_bug_table
-					  SET handler_id='$c_user_id', status='$t_ass_val'
+					  SET handler_id='$c_user_id', status='$t_new_status'
 					  WHERE id='$c_bug_id'";
 			db_query( $query );
 
 			# log changes
-			history_log_event_direct( $c_bug_id, 'status', $h_status, $t_ass_val );
+			history_log_event_direct( $c_bug_id, 'status', $h_status, $t_new_status );
 			history_log_event_direct( $c_bug_id, 'handler_id', $h_handler_id, $p_user_id );
 
 			# Add bugnote if supplied

==== core/constant_inc.php#2 (text) ====

@@ -168,18 +168,19 @@
 	define( 'ERROR_ACCESS_DENIED',					13 );
 	define( 'ERROR_UPLOAD_FAILURE',					15 );
 	define( 'ERROR_FTP_CONNECT_ERROR',				16 );
-	define( 'ERROR_HANDLER_ACCESS_TOO_LOW',				17 );
+	define( 'ERROR_HANDLER_ACCESS_TOO_LOW',			17 );
 	define( 'ERROR_PAGE_REDIRECTION',				18 );
+    define( 'ERROR_STATUS_HANDLER_MISMATCH',        30 );
 
 	# ERROR_CONFIG_*
 	define( 'ERROR_CONFIG_OPT_NOT_FOUND',			100 );
-	define( 'ERROR_CONFIG_OPT_INVALID',			101 );
+	define( 'ERROR_CONFIG_OPT_INVALID',			    101 );
 
 	# ERROR_GPC_*
 	define( 'ERROR_GPC_VAR_NOT_FOUND',				200 );
 	define( 'ERROR_GPC_ARRAY_EXPECTED',				201 );
 	define( 'ERROR_GPC_ARRAY_UNEXPECTED',			202 );
-	define( 'ERROR_GPC_NOT_NUMBER',			203 );
+	define( 'ERROR_GPC_NOT_NUMBER',			        203 );
 
 	# ERROR_LANG_*
 	define( 'ERROR_LANG_STRING_NOT_FOUND',			300 );
@@ -196,7 +197,7 @@
 	define( 'ERROR_FILE_DUPLICATE',					502 );
 	define( 'ERROR_FILE_INVALID_UPLOAD_PATH',		503 );
 	define( 'ERROR_FILE_NO_UPLOAD_FAILURE',		    504 );
-	define( 'ERROR_FILE_MOVE_FAILED',		    505 );
+	define( 'ERROR_FILE_MOVE_FAILED',		        505 );
 
 	# ERROR_BUGNOTE_*
 	define( 'ERROR_BUGNOTE_NOT_FOUND',				600 );

==== core/custom_function_api.php#2 (text) ====

@@ -85,6 +85,25 @@
 	# p_issue_id is the issue number that can be used to get the existing state
 	# p_new_issue_data is an object (BugData) with the appropriate fields updated
 	function custom_function_default_issue_update_validate( $p_issue_id, $p_new_issue_data, $p_bugnote_text ) {
+        # Shouldn't be returning bugs to 'new' status if there's still a
+        # handler set.
+        if( NEW_ == $p_new_issue_data->status && NO_USER != $p_new_issue_data->handler_id ) {
+            trigger_error( ERROR_STATUS_HANDLER_MISMATCH, ERROR );
+        }
+        
+        # Similarly, shouldn't be changing a bug to be in certain statuses
+        # without also setting a handler.
+        if( NO_USER == $p_new_issue_data->handler_id ) {
+            switch( $p_new_issue_data->status ) {
+                case ASSIGNED:
+                case RESOLVED:
+                case CLOSED:
+                    trigger_error( ERROR_STATUS_HANDLER_MISMATCH, ERROR ); // Doesn't return.
+                    
+                default:
+                    break;
+            }
+        }
 	}
 
 	# --------------------

==== lang/strings_english.txt#3 (text) ====

@@ -258,6 +258,7 @@
 $MANTIS_ERROR[ERROR_PROJECT_RECURSIVE_HIERARCHY] = 'That operation would create a loop in the subproject hierarchy.';
 $MANTIS_ERROR[ERROR_USER_CHANGE_LAST_ADMIN] = 'You cannot change the access level of the only ADMINISTRATOR in the system.';
 $MANTIS_ERROR[ERROR_PAGE_REDIRECTION] = 'Page redirection error, ensure that there are no spaces outside the PHP block (<?php ?>) in config_inc.php or custom_*.php files.';
+$MANTIS_ERROR[ERROR_STATUS_HANDLER_MISMATCH] = 'This bug\'s status is incompatible with the handler setting. For example, a bug with \'assigned\' status must have a handler set.';
 
 #$s_login_error = 'Your account may be disabled or blocked (due to too many failed login attempts) or the username/password you entered is incorrect.';
 $s_login_error = 'Your account may be disabled or blocked or the username/password you entered is incorrect.';