Getting damage reduces TNT knockback

The bug

Like how random falling damage seemed when it first debuted in 1.3, I'm not sure if this is a bug or a deliberate change to gameplay mechanics, so...

Player launchers are a popular Minecraft invention. Basically, they involve wiring a ring of TNT so it detonates around the player and propels him/her skyward. However, they only work properly in Creative or Peaceful mode. When you switch to Survival on Easy, Normal, or Hard mode, their launching power receives a seemingly arbitrary nerf. A Player Launcher charged with 32 TNT blocks can send you over 300 blocks high in Creative/Peaceful, but on any other difficulty, the height caps out at about 66 blocks for seemingly no reason.

Here's a brand new video showcasing the issue: http://youtu.be/XihAFVogAQ8

Code analysis

Code analysis by Marcono1234 can be found in this comment.