It absolutely matters what the code intends to do. If it intends to do a DNS lookup, and does that, that's working properly, eepecially if it's doing an DNS lookup on what its regex says looks like a clickable URL. If it means to store an SSN in an encrypted DB and accidentally writes it to plaintext or sends it to twitter, that's a security flaw. If that same app is following the system standard method of doing DNS resolutions, what else should it do? Are you really suggesting that it should somehow encrypt a DNS lookup? Why should this app be held to a higher standard than every single other application that does DNS lookups? This is the absurdity I'm talking about.
I completely agree that one must take into account how that feature fits with your product, user expectations, and privacy, but none of that means a feature that works as intended is a security flaw.
As others have said, prefetching pages has been done for years. Checking to see if it's a valid domain isn't an unreasonable feature for iTerm's URL highlighting, and for those who would prefer it not, he's changed that behavior, but let's not pretend that it was some absurd use of data that no one could have reasonably predicted.
And lastly, let's also stop clutching our pearls about "transmitting data". IT did a DNS lookup, and while technically that means there was a transmission, it wasn't taking what people traditionally call user data and transmitting it to a foreign third party. It's perfectly reasonable to check a domain name against a DNS server. Maybe unwanted, yes, but not even remotely irrational or irresponsible.