No, It's not broken, I meant the behaviour is taken from pgAdmin3, It is disabled by default but once you change the value of "Returns a set?" (under Options tab) to Yes while creating new function it gets enabled.
PFA patch to fix the issue in Function, Procedure & Trigger Function modules where user was not able to update object if user changes the code definition.
RM#2537
This still doesn't seem quite right - the Rows field seems to be always greyed out, so I cannot set it to test at all.