What I expected to happen was...:
Clears the latest added Dyed part
What actually happened was...:
Cleared the latest part but I kept the part I already have, meaning I now have two banners
Steps to Reproduce:
1. Dye a Banner
2. Right clicking a cauldron (filled with water) with a dyed Banner to wash it.
3. You get given a cleaned banner, but the unwashed banner is still in your inventory
Fix would be to "remove" the original when giving a cleaned version of the banner
Linked issues
is duplicated by 1
relates to 2
Attachments
Comments 8

Works properly in survival.
(Therefor it's not a dupe.)
The banner is likely not getting removed because the creative idea is you don't lose the item when you use it.
However, this is not the way leather armor works - when washing dyed leather armor in creative you don't keep the dyed version, so this is likely still unintended behavior. (Just not a dupe.)

This is still a problem in 1.8-pre1.
Also, when the survival inventory is full, you didn't get the washed banner.
In any case, the water in cauldron is not used; on the other hand, the water is used when washing a leather armor.
I believe this to be the same bug and now fixed.

Tried on both 15w31b and 15w31c.
15w31b has this problem the other way around (as described in MC-83883): It dupes banner in survival but not creative.
15w31c goes back to what we had here: It dupes banner in creative but not survival.
So this is still an issue in 15w31c.
Invalid, almost everything works like this in creative mode.

Washing leather armor and washing banner both uses water in cauldron, but have different behavior. IMO we should choose one of the two behavior and change the other one to it; I'd prefer the leather armor way, but this is up to the developer.
And even if this behavior is intended, that washing a banner when survival inventory is full do not give the washed banner is surely a bug. At least it should throw out the washed banner to the world.
As an update, in 15w42a the reported behavior does not change.
Agreed, the differing behavior is enough to make this a bug. About not receiving the cleaned banner if there's no space in creative: Probably intended since you would pick up (and destroy) the dropped banner (like it would drop in survival with a full inventory) a second later anyway.
No need to keep this ticket private because it's not on a release version.