This is the behavior when a newline is not involved. Why should it be different when at the end of line?
- Type “foo bar baz quux wibble wobble timey wimey” on a line
- Put the cursor immediately after the second “o” in “foo”
- Press Alt+DEL repeatedly
Notice that each time you press the key command, the space and the following word is deleted.
Additionally, if you separate each word by multiple spaces, Alt+DEL deletes all of the intervening whitespace and the following word.
And finally, if you look in the keymap, the command is named
So I would say that this is “by design”.