Not a bug, IMO. In general, we have separate individual words for possessive pronouns; we don't create them by adding the possessive suffix to a nominative pron

Not a bug, IMO. In general, we have separate individual words for possessive pronouns; we don't create them by adding the possessive suffix to a nominative pronoun: I -> my (not I's), you -> your, he -> his, she -> her, it -> its, etc. "It's" is just the standard use of apostrophe to indicate a contraction.