Here is an example (inserted as an image since there it doesn't appear it is possible to quote code):
As seen, there are actually three links created, but the third is the active when clicked. The URL protection is replicated in the URL itself, naturally generating 404s.
If I am not mistaken Convert URLs is checked by default. I can ask several people to test both methods of need be, but as it stands at least one (Convert URLs or not) is not being returned by code properly.
