No, it is not required. It is up to the implementation to decide, as the behavior is unspecified. In implementations which allow it, the contents of the current line after the newline is erased must be erased as well. The POSIX specification for
vi states the following (source):
Input Mode Commands in vi
In text input mode, the current line shall consist of zero or more of the following categories, plus the terminating <newline>:
It is unspecified whether it is an error to attempt to erase past the beginning of a line that was created by the entry of a <newline> or <carriage-return> during text input mode. If it is not an error, the editor shall behave as if the erasing character was entered immediately after the last text input character entered on the previous line, and all of the non- <newline> characters on the current line shall be treated as erase-columns.