plPGSQL bug in function creation

Hello,
I think that there is a bug in plPGSQL - or maybe I don't know something
about this language. Try to create this function

Ok., this is the function created in plPGSQL:

CREATE FUNCTION "public"."test" (text, text) RETURNS text AS'
BEGIN
IF $1 THEN
RETURN $1;
ELSE
RETURN $2;
END IF;
END;
'LANGUAGE 'plpgsql' VOLATILE CALLED ON NULL INPUT SECURITY INVOKER;

If you will execute SELECT test('tess', 'erer') -> then "tess" will be
returned. If you will execute: SELECT test(NULL, 'buuu'); -> then it
will return NULL, but it should return "buuu". I tried to figure out why
it is happening so i modifye this function to this:

CREATE FUNCTION "public"."test" (text, text) RETURNS text AS'
BEGIN
RETURN 'test';
END;
'LANGUAGE 'plpgsql' VOLATILE CALLED ON NULL INPUT SECURITY INVOKER;

And when i execute: SELECT test(NULL, 'buuu'); -> it returns me NULL
value, when it should return "buuu". Well I think that something is
wrong here.

If I will modify this function again to this:

CREATE FUNCTION "public"."test" (varchar, varchar) RETURNS text AS'
BEGIN
IF $1 THEN
RETURN $1;
ELSE
RETURN $2;
END IF;
END;
'LANGUAGE 'plpgsql' VOLATILE CALLED ON NULL INPUT SECURITY INVOKER;

Everything is working OK.. So the problem is in TEXT type definition.

I'm using PG 7.3.1 on Win/Cyg