setblock air causes containers to dump items

Windows_Minecraft - Release_920093
(Beta 1.5.0.3)

Summary:

using setblock air "replace" causes containers to dump items

Impact: 
it is often required to use setblock air to remove things from the world including containers. Not being able to do this causes blocking issues when needing to manipulate the world like this.

Repro Steps:

1. Open the attached “clone setblock bug world”
2. Press the button at MCM-257 to setblock air "replace" on a bunch of containers

Observed Results:
setblock was successful but items were dumped on the ground, this occurs regardless is tiledrops is on or off.

Expected Results:
The containers should be removed successfully but the items should not drop. Java handles it this way. If item drops are required, we should be using "destroy"

Screenshots/Videos attached:
repro world attached.