Reuse of a user id causes a transfer of ownership of a file from deleted user to newly created user

Binary package hint: bash

The scenario goes like this; this is a description of exactly what I did. User test existed on the system. I delete user test and create user test again. Then i go to a folder with rwxrwxrwx permissions that is /home/rakesh/test and switch user to test from root. Next I create a file hello.sh and give it permissions rwsrwsrwx. After that I exit user test and get back to root and delete user test, which results in the owner and group of the file changing to 1001 which was the uid&gid assigned to test. This is all fine.

Now, I create user test2 and uid 1001 gets reused. Doing ls -l now shows me that hello.sh now has owner test2. Whats even more interesting is that the setuid still remains. How is this valid behaviour?

Version Info:
root@rakesh-vm:/home/rakesh/test# uname -a
Linux rakesh-vm 2.6.24-21-generic #1 SMP Tue Oct 21 23:43:45 UTC 2008 i686 GNU/Linux
root@rakesh-vm:/home/rakesh/test# cat /etc/issue
Ubuntu 8.04.1 \n \l

Below is the actual console output:
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root@rakesh-vm:/home/rakesh# cd
root@rakesh-vm:~# deluser test
Removing user `test' ...
Warning: Removing group `test', since no other user is part of it.
Done.
root@rakesh-vm:~# clear
root@rakesh-vm:~# clear
root@rakesh-vm:~# adduser test
Adding user `test' ...
Adding new group `test' (1001) ...
Adding new user `test' (1001) with group `test' ...
The home directory `/home/test' already exists. Not copying from `/etc/skel'.
Enter new UNIX password:
Retype new UNIX password:
passwd: password updated successfully
Changing the user information for test
Enter the new value, or press ENTER for the default
        Full Name []:
        Room Number []:
        Work Phone []:
        Home Phone []:
        Other []:
Is the information correct? [y/N] y
root@rakesh-vm:~# cd /home/rakesh/test
root@rakesh-vm:/home/rakesh/test# ls
root@rakesh-vm:/home/rakesh/test# su test
test@rakesh-vm:/home/rakesh/test$ vim hello.sh
test@rakesh-vm:/home/rakesh/test$ cat hello.sh
echo $HOME
test@rakesh-vm:/home/rakesh/test$ ls -l hello.sh
-rw-r--r-- 1 test test 11 2008-11-10 17:21 hello.sh
test@rakesh-vm:/home/rakesh/test$ chmod 777 hello.sh
test@rakesh-vm:/home/rakesh/test$ chmod +s hello.sh
test@rakesh-vm:/home/rakesh/test$ ls -l
total 4
-rwsrwsrwx 1 test test 11 2008-11-10 17:21 hello.sh
test@rakesh-vm:/home/rakesh/test$ exit
exit
root@rakesh-vm:/home/rakesh/test# sh hello.sh
/root
root@rakesh-vm:/home/rakesh/test# ls -l
total 4
-rwsrwsrwx 1 test test 11 2008-11-10 17:21 hello.sh
root@rakesh-vm:/home/rakesh/test# deluser test
Removing user `test' ...
Warning: Removing group `test', since no other user is part of it.
Done.
root@rakesh-vm:/home/rakesh/test# ls -l
total 4
-rwsrwsrwx 1 1001 1001 11 2008-11-10 17:21 hello.sh
root@rakesh-vm:/home/rakesh/test# adduser test2
Adding user `test2' ...
Adding new group `test2' (1001) ...
Adding new user `test2' (1001) with group `test2' ...
Creating home directory `/home/test2' ...
Copying files from `/etc/skel' ...
Enter new UNIX password:
Retype new UNIX password:
passwd: password updated successfully
Changing the user information for test2
Enter the new value, or press ENTER for the default
        Full Name []:
        Room Number []:
        Work Phone []:
        Home Phone []:
        Other []:
Is the information correct? [y/N] y
root@rakesh-vm:/home/rakesh/test# ls -l
total 4
-rwsrwsrwx 1 test2 test2 11 2008-11-10 17:21 hello.sh
root@rakesh-vm:/home/rakesh/test# uname -a
Linux rakesh-vm 2.6.24-21-generic #1 SMP Tue Oct 21 23:43:45 UTC 2008 i686 GNU/Linux
root@rakesh-vm:/home/rakesh/test# cat /etc/issue
Ubuntu 8.04.1 \n \l

root@rakesh-vm:/home/rakesh/test#

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