This is not a bug. Its intended behavior. "Allow creation of records in this table VIA this relationship". This means that you can create a record in the other table through the relationship. It does not mean that just because a new record is created in the parent table, that the child table should create a record itself too. Typically, these signs point to a possible structural issue.
Expanding on that...
The typical way to use the "allow creation..." option is to place a portal to the related table on a layout based on the other (Often called "Parent") table. With this option enabled, typing data into the bottom blank line of the portal automatically creates a new record in the related table and populates any keyfields with matching values from the parent record.