if you have set html rendering as preferred your signature will always be inserted (if you have such of course) on replies regardless of the setting "remove signature when replying"

Reproducible: Always

Steps to Reproduce:
1. set "prefer html to plain text"
2. set "remove signature when replying"
3. reply to an incoming email
Actual Results:  
your signature will be inserted at the end of your reply regardless of "remove signature when replying" setting

Expected Results:  
no signature inserted at end of a reply to incoming mail