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I don't imagine it should do that?

But why did you do it ?
To see if it could be done?

(EDIT: there is a good reason to have this fixed: with small enough window, the "quit" button won't be visible. Of course, one should be able to enlarge the window or switch full screen if one could also make it so small. But it is not 1 or 2 times that I have found myself with a too small window that I have not been able to adjust; quirky/bugged apps and bad window manager in the OS...)
Rather a simple fix:
Minecraft.main(String[])
...
Frame var13 = new Frame();
var13.setTitle("Minecraft");
var13.setBackground(Color.BLACK);
var13.setMinimumSize(new Dimension(400, 240)); // <-- added, tune those values...
...
Tested only with 1.4.7, Win7 64-bit, java 7, but should work...

Affects 13w09b.
I think you have to have a good reason to scale down the windows that much. And if there is such a reason, why prevent it...

As MC-13661 (a comment in there) indicates, it is not always the player who has a reason to reduce the window size to super-tiny sizes. Just like I predicted, another bug elsewhere makes it for you, so there is a good reason to at least try to prevent it. Then again, my single-line fix shown above might not be enough to convince LWJGL to not mess things up.
I had misunderstood that issue to another one I have been experiencing. Nevertheless, the issue I am having is a prime example why applications should enforce some usable minimum size, at least if it is not safe to simply force-close the app from the X-button in the window corner or via other means.
Is this a bug ?