3ds Max :: Converting Editable Mesh To Editable Poly Creates Extra Geometry?

A simple editable mesh object, a piece of terrain, which has standard texture on it an no modifiers, just some UV's on channel 1.

Whenever I add "edit poly" modifier or convert it to editable poly, additional geometry will be created. Statistics show that only vertex count of the selected object goes up about 6x but no additional faces are generated. This not the case when check on a sub-object level, there are lot of additional faces created. I've never seen this happen, jumping between edit poly and edit mesh has been easy without any errors like this.

I've tried the same model with 2013 as well - same results. Also tried collapsing the object, removing uv-mapping, different materials, attaching the mesh to empty box, etc, garbage collection, exporting it to obj and importing - even then same thing happens.