'begin transaction' new syntax bug?

It seems to me that new 'begin isolation level ...' syntax does not work
with current cvs head:

#
# old syntax:
#
psql> SELECT VERSION();
version
---------------------------------------------------------------------------
PostgreSQL 7.5devel on i686-pc-linux-gnu, compiled by GCC gcc (GCC) 3.3.3
(Debian 20040401)

psql> BEGIN;
BEGIN
psql> SET TRANSACTION ISOLATION LEVEL SERIALIZABLE;
SET
psql> SHOW TRANSACTION ISOLATION LEVEL;
transaction_isolation
-----------------------
serializable

#
# new syntax?
#

psql> BEGIN TRANSACTION ISOLATION LEVEL SERIALIZABLE;
BEGIN
psql> SHOW TRANSACTION ISOLATION LEVEL;
transaction_isolation
-----------------------
read committed

I would have expected 'serializable' ?

"If the isolation level or read/write mode is specified, the new
transaction has those characteristics, as if SET TRANSACTION was
executed."

--
Fabien Coelho - coelho(at)cri(dot)ensmp(dot)fr