Yep, looks like a bug. The canvas appears to paste the object relative to it's own x/y coordinates rather than the world x/y coordinates, so if the canvas is tipped on it's side, and the bullet hits it on the bottom, then the canvas still thinks it's being hit on the side, so it pastes on it's side, which in real-world coordinates is now actually the top.
Strange. You should report it to the bug tracker.