Noted on http://drupal.org/node/206761#comment-852803 and confirmed on latest (stable) release of Drupal.
Tested on the module given in the example.

Apparently clicking on the "Reset to defaults" button while invalid data is submitted in the fields returns "invalid data submitted" notification.
"Reset to defaults" should bypass validation and just set the default values (or pass through validation after the default values have been set).

Comments

coltrane’s picture

Status: Active » Closed (duplicate)

This may be more of a feature request (though it is a UI and DX bug) but theres a 7.x issue at #332614: allow buttons like 'reset' to bypass validation that references #370537: Allow suppress of form errors (hack to make "more" buttons work properly) where work is happening. Closing this as a dupe, a 6.x patch can be rolled from other issues and applied if needed.