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It's a bug to not be sensitive to transient-mark-mode. That's the fundamental premise of enabling this minor-mode. The user is indicating that the region he's interested in will always have the mark active and be highlighted.
Emacs already has built-ins that respect this -- region-active-p. Why not just use that?
That is not true for Emacs 22.
In Emacs 22, transient-mark-mode is nil and there is no region-active-p function.
iedit-transient-mark-sensitive make it possible to use iedit without highlighted region.