sed: dot does not match newline in multi-line mode (the M modifier) - bug or feature?

[Dmitry Bolshakov]

Hi

$ sed --version | head -n1
GNU sed version 4.2.1

test command:

$ echo $'line1\nline2\nline3' | sed -n '1h;1!H;$bend;b; :end g;s/.*/dot matches 
newline/;p; g;s/.*/dot does not match newline/M;p'
dot matches newline
dot does not match newline
line2
line3

I could not find anything about such behaviour in manual
is this bug or feature?

--
With best regards
Dmitry Bolshakov