Bug: Issue with Default Parameters

I noticed another issue with default parameters which I didn't see listed.
I see it in 1.14 at any rate not sure it is an issue in lower versions.

That is if I write a function like this:
CREATE OR REPLACE FUNCTION test_defaults(test text DEFAULT '')
RETURNS text AS
$$
SELECT 'hello'::text;

$$
LANGUAGE 'sql';

And then use the variable dialog to defined variables for it -- say
search_path.

--it generates the invalid statement
ALTER FUNCTION public.test_defaults(text DEFAULT ''::text) SET
search_path=public;

Instead of
ALTER FUNCTION public.test_defaults(text) SET search_path=public;

Thanks,
Regina