useradd added a user with an already used UID

[aka]

I have my primary user with uid 1000
$ id
uid=1000(akm) gid=1000(akm) groups=1000(akm),4(adm),20(dialout),24(cdrom),46(plugdev),110(netdev),111(lpadmin),119(admin),122(sambashare),1001(dba)

I wanted to create a user with the same group as me (akm) but with a lower UID.
I used:
$ sudo useradd -mN -g akm -K UID_MAX=900 nektois
But it created the new user with the same uid 1000. I wasn't able therefore to delete it or alter, since the usermod/userdel complained that the user already logged in.
I was able to delete the user via gui applet, but /etc/passwd still has it
$ grep nekto /etc/passwd
nektois:x:1000:1000::/home/nektois:/bin/sh

ProblemType: Bug
DistroRelease: Ubuntu 10.10
Package: passwd 1:4.1.4.2-1ubuntu3.2
ProcVersionSignature: Ubuntu 2.6.35-30.54-generic 2.6.35.13
Uname: Linux 2.6.35-30-generic x86_64
NonfreeKernelModules: nvidia wl
Architecture: amd64
Date: Sun Jul 17 08:15:31 2011
InstallationMedia: Ubuntu 10.10 "Maverick Meerkat" - Release amd64 (20101007)
ProcEnviron:
 PATH=(custom, user)
 LANG=en_GB.utf8
 SHELL=/bin/bash
SourcePackage: shadow

[Launchpad Janitor (janitor)]

Status changed to 'Confirmed' because the bug affects multiple users.