Which is wrong? diff or apply?

Today, I tried this in my git.git checkout:

  $ mv transport-helper.c wt-status.c
  $ git diff -B -M | git apply --cached
  error: wt-status.c: already exists in index

That is, I overwrote the tracked wt-status.c with a completly different file 
that is also tracked. Then I try to stage the change using git apply.

git diff -B -M reports this:

  diff --git a/transport-helper.c b/wt-status.c
  similarity index 100%
  rename from transport-helper.c
  rename to wt-status.c

Notice that there is no mention that the previously existing wt-status.c was 
removed. I wonder whether this is a bug.

Or is it the safety valve in git apply that does not allow to overwrite an 
existing file which should not trigger in this case?

-- Hannes