i expected the leather pants were going to be repaired:
i was going to repaire some cyan paintet leather pants when i took it out of the box and preesed 'the inventory button' it did not become repaired and i got the leather and the pants back but i did not got my 1 lvl back:
1. Put a pair of cyan pants in the anvil and then a piece of leather in the other space
2. then i taked the new repaired pants out
3. and then i pressed the 'inventory button' and then i got a piece of leather and the pants back but i did not get the lvl i used back
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I can confirm this bug, here my entry of http://www.minecraftwiki.net/wiki/Issues/Weekly_12w42b
— Repairing items with the Anvil sometimes doesn't work. I can reproduce that with one item: Input is a Diamondsword Sharpness II and Looting I, durability 8/1561. I'm trying to repair that sword with 3 diamonds for 24 XP levels to durability 1178/1561. I can take that repaired sword out of the Anvil GUI into my inventory, the XP is virtually substracted, and the GUI is empty. But when closing the GUI the sword and the diamonds drop - the sword is still in the old, unrepaired state (8/1561) and the XP bar resets to the old count when gaining new XP.
That procedure is not always repeatable, I suppose that bug occurs, when the repaired item is not repaired completely.

@Noah Irgens Seidler: Did the anvil-repairing-sound play as you took the leather pants out of the anvil ? I'm quite sure when the sound plays, the item is repaired, and when the sound will not be played, the item will not be repaired.
I can't replicate this. The pants were successfully repaired, I lost 1 level from repairing, and did not get an extra leather.