No, the Allen Brew effect is not a bug; it gives a higher armour boost than a level 10 armour potion (by a little more than 50%).
In the original release of D2:ED Allen gave only 1 skill book (for his second quest), but in DKS/D2:DC he gives one for each. If you choose Barbatos you can use the wisdom potion yourself without failing a quest, but he doesn't give an extra skill book.
