gmakhs It is by design that the user can not see the deleted website. I'm afraid I can't recreate the issue you are seeing. Are you able to tell me a little more?
The current functionality is - When a website is soft deleted from a users account, the website is removed from their website list and retained in the admins account. At any point, a user can add another website using the same domain. When a new site is added using the same domain, the domain of the original site (retained in the admins account) is prefixed with 'deleted-X'.