PHP Notice, Warning when saving the block

When I installed the module on a Fresh Drupal 7.12, I have discovered a minor bug which can be reproduced using the following steps.

1. Login as admin and Install the module.
2. Go to Structure > Blocks and create a custom block with some text in the body and save it.
3. Go to Structure > Menus > Main Menu > List links.
4. Click edit on the home link, select the custom block you created on the previous step in the Attach Block field set and save it.
5. Go to the home page and test that the attached block is working properly (I have verified that this is working up to this stage).
6. Now go to Structure > Blocks and delete the custom block you created.
7. Go to Structure > Menus > Main Menu > List links and you can still see attach block notice next to the Home link without an actual block linking to it.
8. Click on the edit link in the home link, Select none from the Attach Block field set and save it.
9. You can see the following notice and the warning
   

   Warning: Missing argument 2 for block_load() in block_load() (line 692 of /Users/sankatha/src/dev_drupal_7/modules/block/block.module).
   Notice: Undefined variable: delta in block_load() (line 702 of /Users/sankatha/src/dev_drupal_7/modules/block/block.module).