Can you look at this part of code in question.php to see if it conflicts with what you are doing
// Validate the question category.
if (!$category = get_record('question_categories', 'id', $question->category)) {
print_error('categorydoesnotexist', 'question', $returnurl);
}

//permissions
$question->formoptions = new object();

$categorycontext = get_context_instance_by_id($category->contextid);
$addpermission = has_capability('moodle/question:add', $categorycontext);

if ($id) {
$canview = question_has_capability_on($question, 'view');
if ($movecontext)

else {
$question->formoptions->canedit = question_has_capability_on($question, 'edit');
$question->formoptions->canmove = (question_has_capability_on($question, 'move') && $addpermission);
$question->formoptions->cansaveasnew = (($canview ||question_has_capability_on($question, 'edit')) && $addpermission);
$question->formoptions->repeatelements = ($question->formoptions->canedit || $question->formoptions->cansaveasnew);
$formeditable = $question->formoptions->canedit || $question->formoptions->cansaveasnew || $question->formoptions->canmove;
$question->formoptions->movecontext = false;
if (!$formeditable)

}

I notice that you don'it have permission to move although $question->formoptions->canmove is necessary in all cases...

question.php is quite intricate so I cannot say I master it.
however save as a new question is saved as a new question in save_question() of questiontype.php
the question->id has been set to 0 by question.php
if (!empty($fromform->makecopy))

then in save_question() of questiontype.php
// Question is a new one
if (isset($form->categorymoveto))

else

I have to check how the form set $form->categorymoveto

more later

I duplicated Joseph's problem on demo.moodle.org. I discovered that in order to edit a question and save it back into the same System category, you need 'move' in addition to 'add' and 'view'. Without 'move' you get the Save button, but it gives the error message.

Oddly, you do not need 'edit' to edit questions, although Tim Hunt said that you do. See:

http://moodle.org/mod/forum/discuss.php?d=94773#p419350

in edit_question_form.php
if (!isset($this->question->id))

elseif (!($this->question->formoptions->canmove || $this->question->formoptions->cansaveasnew))

elseif ($this->question->formoptions->movecontext)

else {

So as you don't have formoptions->canmove the element categorymoveto is not created

P.S.Joseph, I am using these comments also to complete my knowledge ...( and perhaps yours...)

In edit_question_form.php
if (!empty($this->question->id)){
//editing / moving question
if ($this->question->formoptions->movecontext)

elseif ($this->question->formoptions->canedit || $this->question->formoptions->canmove ||$this->question->formoptions->movecontext)

if ($this->question->formoptions->cansaveasnew)

$buttonarray[] = &$mform->createElement('cancel');
} else

So effectively canedit is not the condition to have the savechanges button.

Perhaps a solution will be to have only one place that controls what you can do with a question.

Clearly this is not in the edit_question_form() because it can be modified by question types
and either in save_question() function where all this should be set before.

question.php should be the place to do it.

This could necessitate the creation of specific formoptions for all actions possible in editing a question
i.e saveas, edit, create, move in new context, move only in one context , save as new etc.

Or perhaps more precise formoptions related to the buttons themselves i.e savasnew_buttond

An additional argument is that the control of where to save in moodle should not be controlled by the question types although they can control when all the data is ready to be saved using the next_wizard_form (i.e.calculated question ).

Jamie, do you have any thoughts on this?

I committed changes to 19 stable and HEAD to fix this. The question form submission and processing logic is quite complex because of the number of different cases. Tested moving, saving as new and moving context for users with and without move permission. Also tested with random questions. All seems to work fine.