Media Upload Directory Bug?

Due to a problem I outlined here, I messed around with the media settings.

I found out that if you turn off the “organize into year/month” option and use a custom directory, upload some images, then revert everything to default (organize into year/month, wp-content/uploads) the media screen will file that those images are stored directly into the wp-content/uploads directory, where in fact they remain in the previous custom folders. Even the thumbnails wouldn’t appear, as it looks inside an empty folder.

Is it meant to be like that or is it a bug?