Is it by design so neither really.
You can just about find it in the docs but it doesn't jump out...
Index options and locking modes
Table 1-7 shows the index options supported for allpages-locked and data-only-locked tables. On data-only-locked tables, the ignore_dup_row and allow_dup_row options are enforced during create index, but are not enforced during insert and update operations. Data-only-locked tables always allow the insertion of duplicate rows.
Table 1-8 shows the behavior of commands that attempt to insert duplicate rows into tables with clustered indexes, and when the clustered indexes are dropped and re-created.
Options | Allpages-locked table | Data-only-locked table |
|---|---|---|
No options specified | Insert fails with error message 2615. Re-creating the index succeeds. | Insert succeeds. Re-creating the index fails with error message 1508. |
allow_dup_row | Insert and re-creating the index succeed. | Insert and re-creating the index succeed. |
ignore_dup_row | Insert fails with “Duplicate row was ignored” message. Re-creating the index succeeds. | Insert succeeds. Re-creating the index deletes duplicate rows. |