Yes, and since the sentence is not relayed back to the phone, the keyboard doesn't know better. This is the same issue that affects gesture keyboards.
This happens with all iOS keyboards.
Standard keyboard behavior for most iPhone keyboards.
Confirmed for Samsung Galaxy S III (SGH-T999) with Android 4.1.2
Confirmed for Samsung Galaxy S III (SGH-T999) android 4.1.2
This is likely your keyboard fixing the lowercase I.
Attached screenshot of issue.
Ah... I wish there was smoother transitions for it then.
One part of the video shows it not changing with elevation. 0:06 to 0:20
Updated to include more info.