something going wrong with server transfer?

It happened to a friend of mine - he changed servers to change is name, then transferred back. Even though he definitely had been listed on my friend list as "deleted", his new name appeared in place of the "deleted" when he was back.

Is this common or some kind of bug? I don't think it should be possible.

You can only be friends with people on the same server so when he was on other server will show as deleted. I think friend list record you ID so when he came back the game recognice the ID and updated the information.