Currently it works this way:
You select a text to link, click the hyperlink button and paste the url. When you hit OK the text you selected is now linked. There is even a title feature in the current hyperlink but this only fills out the title attribute of the link.
But when inserting links to other SO questions, or when generating a collection of links this becomes a pain to juggle. So I suggest a small change.
If you do it the old way and select a text and click the hyperlink button, there are two fields. One is filled out "Title" since you selected a text. And the other is a url.
If you click the hyperlink button without selecting a text, both fields are empty and it will be inserted where the text cursor is.