The Jargon File (version 4.4.7, 29 Dec 2003):

working as designed
 adj.

    [IBM]

    1. In conformance to a wrong or inappropriate specification; useful, but
    misdesigned.

    2. Frequently used as a sardonic comment on a program's utility.

    3. Unfortunately also used as a bogus reason for not accepting a criticism
    or suggestion. At IBM, this sense is used in official documents! See BAD
    .


The Free On-line Dictionary of Computing (30 December 2018):

working as designed

    (IBM) Conforming to a wrong or inappropriate
   specification; useful, but misdesigned.  Frequently used as a
   sardonic comment on a program's utility or as a bogus reason
   for not accepting a criticism or suggestion.  At IBM, this
   sense is used in official documents!

   See BAD.

   [Jargon File]

   (1995-04-04)