Dragging a prop shape into the editor and then scaling it to a new shape, then converting the new shape into a mesh doesn’t save the mesh in the new scale – it converts back to it’s original prop shape. It saves the material, however.
A work around is to drag a second prop into the scene, make it not visible, and then save the two selected meshes as a new mesh. Then it keeps the new scale.
jtxp,
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Cheers,
Cool 
For anyone else having an issue, a quick work around is just alt+dragging the mesh to make a duplicate, then hiding the visibility on the duplicate (I assume this means the duplicate mesh won’t render come game time). Select both meshes from the world outliner and convert to new mesh.