News (posts) page defaulting to my main/home page?

This is a weird one I can’t figure out. I have the following pages:

Home (using home.php / home template)
News (using news.php / news template)

I’m using the news page as my posts page instead of the regular index.php. The news/posts page is NOT the first page I want people to see.

Under Settings > Reading I set the landing page to be a static page, Home. I set the posts page to be on the News page.

When I goto http://www.mysite.com I see the Home page as expected. But when I goto http://www.mysite.com/news/ I also see the home page instead of the News (posts) page.

I know that home.php is treated specially by WordPress. I changed the filename to homepage.php and everything ended up working as expected.

But, is this behavior normal? It doesn’t seem like I should have to rename home.php to get this working since I specified exactly what I want for each page under Settings > Reading.

Any hints?