This is not actually a bug, but happens because the logger is instantiated directly, rather than through logging.getLogger(...). Because of the direct instantiation, the logger cache isn't tracked via setLevel() - because the logger doesn't end up in logging.manager.loggerDict.

However, I will incorporate Karthikeyan's test (modified to avoid direct instantiation), and update the documentation to strengthen the information to avoid direct instantiation of loggers.