Selecting type for transformations

You can rotate, reflect, scale, and shear type just as you do other objects. However, how you select the type affects the transformation results:

To transform the type along with its bounding path, select the type object and use the Rotate tool to rotate the object and text.
To transform just the bounding path, but not the type it contains, select the type object and drag with the Selection tool.

Rotated type path (left) compared to rotated type and path (right)