When I click save button to save back the newly create document (by clicking on New Document button) none of existing documents within the library appears in the dialog. why? is it a normal in SharePoint? thanks
It creates a new document based on the template you have selected for the Document Library. For example a new "Word" document. So your dialog is in Excel or in Word and has a preselected file extension in the save dialog.
I guess "*.docx" is preselected when you create a new Word file so you only see files in the target library that also have that extension.
Of course you can select another file name extension or enter manuall "." in the file name section of the dialog to see different files or all files (inside the document library).