Curious special parameter expansion when IFS is null

[A . Alper ATICI]

Configuration Information [Automatically generated, do not change]:
Machine: i686
OS: cygwin
Compiler: i686-pc-cygwin-gcc
Compilation CFLAGS:  -DPROGRAM='bash.exe' -DCONF_HOSTTYPE='i686'
-DCONF_OSTYPE='cygwin' -DCONF_MACHTYPE='i686-pc-cygwin'
-DCONF_VENDOR='pc' -DSHELL -DHAVE_CONFIG_H -DRECYCLES_PIDS  -I.
-I/home/RLandheer/cygwin-contrib/bash/2.05b-16/bash-2.05b
-I/home/RLandheer/cygwin-contrib/bash/2.05b-16/bash-2.05b/include
-I/home/RLandheer/cygwin-contrib/bash/2.05b-16/bash-2.05b/lib  -O2
uname output: CYGWIN_NT-5.1 deskt-xp 1.5.7(0.109/3/2) 2004-01-25 18:44
i686 unknown unknown Cygwin
Machine Type: i686-pc-cygwin

Bash Version: 2.05b
Patch Level: 0
Release Status: release

Description:

$ set a b c; IFS=, a=$* b="$*"; echo $a; echo "$a"; echo $b; echo "$b"
a b c
a,b,c
a b c
a,b,c

$ set a b c; IFS= a=$* b="$*"; echo $a; echo "$a"; echo $b; echo "$b"
a b c
a b c
abc
abc

Considering the output when IFS=, is correct; what's the explanation
of the output when IFS is null unless it is a bug?

Repeat-by:

set a b c; IFS= a=$* b="$*"; echo $a; echo "$a"; echo $b; echo "$b"