bug in COPY implementation (all versions of Postgres)?

I came across an issue that looks like a bug in COPY. There are many
similar posts, e.g.
http://stackoverflow.com/questions/13485030/strange-postgresql-value-too-long-for-type-character-varying500,
without a good unswer.

Simplified steps to reproduce the issue:
1. CREATE TABLE TEST (description varchar(10));
2. Insert value 'Galaxy\040Tab' using command COPY TEST(description) FROM
stdin WITH DELIMITER '|' CSV.

The following error is returned: value too long for type character
varying(10)

Of course real life scenarios are more complex and different characters
were used (\042 and \005).

Is this a bug, or an incorrect use of COPY/CSV?

Thank you
Konstantin