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it's not wrong to modify it (& we both know that was NOT your original question)
it was fine to modify it, and as far as the image owner is concerned, it wasn't modified anyway...
your question was, and is:
the answer has been, and is:
(in my don't-know-it-all opinion) you do not have a derivative work to begin with, you just have a licensed image you flipped... and yes the license still applies to the one legal use, and it still applies to the any additional illegal usage
it was fine to modify it, and as far as the image owner is concerned, it wasn't modified anyway...
your question was, and is:
My question is does the license still apply to my derivative work & does my derivative work violate any copyright or fair use laws even if they aren't listed specifically in the license if I choose to use the derivative work elsewhere?
the answer has been, and is:
(in my don't-know-it-all opinion) you do not have a derivative work to begin with, you just have a licensed image you flipped... and yes the license still applies to the one legal use, and it still applies to the any additional illegal usage