The function appears to calculate sizes using binary (base-2) division
You don't need to infer this, you can just read the documentation.
"Converts a size in bytes into a more easily human-readable format with size units (bytes, kB, MB, GB, TB, or PB as appropriate). Note that the units are powers of 2 rather than powers of 10, so 1kB is 1024 bytes, 1MB is 10242 = 1048576 bytes, and so on."
Which means it is not a bug. And it's not the kind of behavior we are going to change on people.
Maybe go write and submit a pg_size_iso(byte_count [, basis 2|10 default 10]) function. I agree this is a gap that could be addressed.
I'd probably drop the pg_ prefix as well - that always just seemed odd to me. We have plenty of functions that are non-standard that we don't prefix like this.
