JDBC escaped scalar functions fail when used in function definition

While testing postgresql-9.4.1208.jar with our system, code is now
failing when it attempts to use {fn now()} in the body of a PostgreSQL
CREATE FUNCTION statement. This worked fine on 1207 and all previous
versions of the driver.

In other words, the code below succeeds on 1207 but fails on 1208
(passing in server, port, database, username, and password as parameters):

import java.sql.*;

public class PGTest
{
public static void main(String[] args)throws SQLException
{
try (Connection conn = DriverManager.getConnection("jdbc:postgresql://" + args[0] +":" + args[1] +"/" + args[2], args[3], args[4]))
{
try (PreparedStatement stmt = conn.prepareStatement(
"CREATE FUNCTION public.fn_now() RETURNS VOID AS $$\n" +
" BEGIN\n" +
" SELECT {fn now()};" +
" END;\n" +
"$$ LANGUAGE plpgsql;" +
"DROP FUNCTION public.fn_now();")) {
stmt.execute();
}
}
}
}

Bug? Intentional change in behavior? Thanks, Adam