I just chose Annotate for a pdf that was in a Note. It opens the EN Annotate program. While it might be 'external', it is a part of EN described as a 'feature' of EN that I pay for.
I made notes and highlighted some text and saved it. Back in the Note, I found the same garbled appearance, looking just as you said: upside down and backwards, overlaid on the pdf content.(see below) The pdf was no longer accessible for opening or downloading or further annotating. (Beyond pages covered by the upside down and backwards overlay, I could see and read the rest of the pages of the pdf.) As far as I can tell, it ruined the pdf. (If I didn't have the original pdf in a hard drive folder, I'd be SOL with loss of the document. If I double click the top bar of the pdf, it opens in Adobe reader with an error "An error exists on this page. Please contact the person who created the PDF document to correct the problem." However, as I scroll down, it looks ok and shows the list of annotations first, and then gets to the annotated pdf, just as I hoped it would.
(This might be the first time I used the embedded pdf annotation 'feature'. I have found it cumbersome and time consuming to add text notes, but this time I was determined to make it work. When I was done, I thought it was ok because I put in the time to make it ok. Then this happened and I find myself here to see if I'm the only one. I'm not. That doesn't make me any happier.)
Update: As I am writing this, I am revisiting EN and that note. At this point, I did see the usual options in the Note, at the top bar of the pdf, and I was able to select Edit & Annotate and it looks just as I left it. Good! This time, I unclicked "include annotation summary" (at the top right) and I did not get the upside down, backwards overlay. So I'd say I'm ok, but what happens with "include annotation summary" cannot be what was intended, so it ought to be looked at and fixed.
BTW, I was using EN app ver 10.42.7 on a laptop PC, using up-to-date Win 10.
Here is what it looks like: