Can't change sound

I see where to do so in the settings but no matter what I select it just saves as “Chime (iPhone)”

This might just be the one I tried to create myself. I appear to be able to change the sound in the example chimes the app came with

How did “iPhone” name get it here :|.
By default application plays device notification sound. But you can change that. However if it fails to load (and play) selected sound then it will play device default notification or alarm sound.