Concurrent delete and insert on same key, potentially a bug

Hello,

Please excuse my ignorance, because I might be missing something obvious, but how is this not a bug?

I simply open 2 terminals and connect to the same database.

**TERMINAL 1:**

BEGIN

sasa=# select * from tst1 where id = 1;
 id
----
  1
(1 row)

**TERMINAL 2:**

sasa=# begin;
BEGIN
sasa=# select * from tst1 where id = 1;
 id
----
  1
(1 row)

**TERMINAL 1:**

INSERT 0 1

**TERMINAL 2:**

sasa=# delete from tst1 where id = 1;

// client is blocked due to row lock/index lock

**TERMINAL 1:**

sasa=# commit;
COMMIT

**TERMINAL 2:**

// resumes because terminal 1 committed transaction

DELETE 0
sasa=# insert into tst1(id) values(1);
ERROR:  duplicate key value violates unique constraint "tst1_pkey"
DETAIL:  Key (id)=(1) already exists.

To my understanding, the second client (terminal 2) should already see changes from the first client, because the transaction isolation level is READ COMMITTED and the first client did commit its transaction.

Thanks in advance!

Kind Regards

Sasa Vilic