I don't see a bug here. The behavior that I think you're
expecting is controlled by other options (--overwrite-dir,
--keep-old-files, --overwrite, --recursive-unlink, --unlink-first).
These options control behavior that removes files and/or
directories independently of whether they are symbolic links,
Tar is removing the file or directory in your case according
to the default settings (where files are treated differently
from directories). A symlink is normally not followed, and is
thus treated like any other non-directory, but if you specify -h
it is followed and (if it is a symlink to a directory) is treated
differently from files, just as directories are ordinarily treated
differently from files.