Lava and water with fish react abnormally

The first screenshot shows what happened when a fish bucket is poured into lava shown in the second screenshot.

Let's just assume the water source block is called Block 1, and the flowing water block is called Block 2.

What I expected:

Block 1 turning into obsidian, and lava in Block 2 disappearing (the fish being in Block 2 and generally suffocating to death).

What actually happened:

Block 1 turning into water (the fish living and swimming as normal), and Block 2 turning into cobblestone.

How to reproduce:

It's obvious upon seeing the screenshots.  

I don't know if it's intended. But the reaction is indeed abnormal.