I agree — if that's what they've done then they've basically killed the privacy of private mode.
That said, the release note is "allow cookies set during regular browsing to be available after using Private Browsing", which could equally just mean that entering private browsing mode no longer throws away all your session cookies (assuming it did before?), it simply temporarily hides them. That is, assuming Apple meant "using Private Browsing" to signify an ongoing state of affairs rather than just hitting the switch for private browsing.
To be honest, I think Apple could have been clearer. El Reg's interpretation could equally be true.