For the new image to be added to the gallery.
The new image is added, but all existing ones are removed.
OS X 10.13.6
Chrome 78.0.3904.87
This seems to happen when the existing images aren't loaded on the media library when you select the new one. On this GIF you can see that the gallery images aren't shown, so the issue happens (you can see that once you select it shows the little "1" icon):

When you search for the images, and it shows the images that are already in the gallery, the issue doesn't happen:

This issue also happens when you try to add a new image from the free Pexels library:

User reported that this started happening with all existing galleries on their site, it seems after the pencil icon to edit the gallery was removed.
Reported on 2475906-zen.
Looks like this is Calypso specific. I can't reproduce in WP-Admin on Simple, Atomic, or self-hosted but can reproduce via Calypso on all three.
Thus, it appears that the current workaround is to add the image to your media library first or use WP-Admin.
Something is off with the integration -- likely coming in from the new order function.
I can't replicate this at all, not with production nor Horizon (which is right now running a newer alpha Gutenberg). @carinapilar @JoshuaGoode anything else you can give to help replicate?..
I can only reproduce this when adding images from the free Pexels library:
@kwight, I tested now on a Free Simple site on WordPress.com. Here are all the steps to replicate with the Pexels library:

To replicate what the user is facing we would need to have lots of images on the media library, that are only loaded when you scroll down. It seems that if the images that are already on the gallery aren't on the first load when you go to select a new one, this error happens.
Thanks @carinapilar! I can replicate now when the gallery is using images that are only loaded when scrolling down. Note that I needed to reload the browser (otherwise the images would be already loaded on the media modal).
I recorded this video with the whole process: https://cloudup.com/cRDvvvTYFP7
The issue with the Free photo library ended up being unrelated to Gutenberg, since I can reproduce it as well with the classic editor, so I opened a separated issue for that: https://github.com/Automattic/wp-calypso/issues/37450
I also opened a PR that should fix the issue with the images that are not loaded on the first load: https://github.com/Automattic/wp-calypso/pull/37452