In otherwords \includegraphics{file} will find file.png if you are in pdflatex, and file.eps if you are in latex. It sounds a bit wonky, but turns out to work well in complicated situations where you may want do generate different output from related files.

My recollection from my days of primarily working in Unix is that the OS doesn’t have much to do with extensions — they were more often created, used, and understood by specific applications. Thus it is much more likely that extensions are longer than 3 characters and may have unusual characters in them. The OS basically only distiguishes between executable and non-executable files (and directories of course). Some applications look at the header of a file for attributes, too.

This may have changed with the more common use of windows and desktops on *nix machines. Presumably in that case one would want more specific information about file types for use in context-specific behavior, double-clicking, and right-clicking.

Anyway, since LaTeX grew up in Unix environments, the parser may not be ‘naive’ so much as conforming with the possible vagaries of Unix filename extensions.

That’s why I’d say it is a bug in this case — since John is using LaTeX on a Windows machine, the parser should default to Windows standards. Perl does this by defaulting to the conventions for the OS determined when it is built.

A primarily-Unix user might think that just grabbing the bits after the last dot would be naive behavior!