This question is marked as a dupe, but the dupe cited has been deleted.
Should this be possible? Is it a bug or by design?
This is by design. A question can always be deleted regardless of whether there are others who link to it as a duplicate.
Historically, linking as a duplicate was achieved by merely adding a link to a question's body. Now this is a bit different, so there could, in theory, be mechanisms that prevent you from deleting a question that is still linked to (or at least give you a warning).