When administering a user, admin user's block settings are loaded

To reproduce:

1) Log in as an admin user, with privileges to "administer blocks" and "administer users".
2) Go to admin > site building > blocks, and configure the "Who's online" block so that "Hide this block by default but let individual users show it" is selected. Save these settings.
3) Go to admin > users > users, and edit a user other than yourself.
4) Under "Block Configuration", change the setting for the "Who's online" block. Save.
5) Edit the same user.

Expected behavior:

The form should reflect the change which was just made to the settings.

What happens instead:

The form displays your (the admin user's) settings every time.

Now, the admin user's settings aren't necessarily being saved to the other user's account -- unless you click the submit button at this point. But they will always be displayed.

I believe the problem is in block.module.

function block_user($type, $edit, &$user, $category = NULL) {
  global $user;
  switch ($type) {
    case 'form':
      if ($category == 'account') {
        $result = db_query("SELECT DISTINCT b.* FROM {blocks} b LEFT JOIN {blocks_roles} r ON b.module = r.module AND b.delta = r.delta WHERE b.status = 1 AND b.custom != 0 AND (r.rid IN (%s) OR r.rid IS NULL) ORDER BY b.weight, b.module", implode(',', array_keys($user->roles)));
        $form['block'] = array('#type' => 'fieldset', '#title' => t('Block configuration'), '#weight' => 3, '#collapsible' => TRUE, '#tree' => TRUE);
        while ($block = db_fetch_object($result)) {
          $data = module_invoke($block->module, 'block', 'list');
          if ($data[$block->delta]['info']) {
            $return = TRUE;
            $form['block'][$block->module][$block->delta] = array('#type' => 'checkbox', '#title' => check_plain($data[$block->delta]['info']), '#default_value' => isset($user->block[$block->module][$block->delta]) ? $user->block[$block->module][$block->delta] : ($block->custom == 1));
          }
        }
      # etc
      }
  # etc
  }
}

Wherever the function above says "$user", shouldn't it say "$edit" instead? Here, $user refers to the admin user (the currently active account), and $edit represents the user account being edited.