It's what's intended, but it's not what's true. Usually this bites on video, but it even bites on, say, SVG:
http://stackoverflow.com/questions/10261460/internet-explore...
Ostensibly, this is to protect users. Quoting TechNet:
When files are served to the client, Internet Explorer uses the following pieces of information to decide how to handle the file:
1. File name extension, the corresponding ProgID and CLSID for the registered handler of that file name extension.
2. Content-Type from the HTTP header (MIME type), the corresponding ProgID, and CLSID for the registered handler of that Content or MIME type.
3. Content-Disposition from the HTTP header.
4. Results of the MIME sniff.
-- http://technet.microsoft.com/en-us/library/cc787872(v=ws.10)...
Yes, I'm aware that this is probably a workaround for broken web servers, or brain-dead server admins. This workaround should never have been deployed, as it breaks interactions with non-broken web servers.
You can't call either browser broken here. One is doing what the spec says is correct. The other is doing what the user says is correct.