Chuckles to self. Done that myself even though I should know better. It actually is not a flaw in IH as such.

Here's the thing. In Zen Cart the 'default' image is the small image. To me that is counter-intuitive, but there you go. If no large and medium are supplied then the small image is used. But, hey, it might actually be big because it is the only image. But it is still saved in the same place as small images. If there isn't a small/default image specified then Zen Cart and Image Handler won't know what image applies to what product and won't be able to use 'large' or 'medium' versions. The 'small' image is the one that the system uses to 'identify' the other images.

As I say, this to me is counter-intuitive but it is just the way it is.