Have just upgraded to 1.3.9a but this bug was also present in 1.3.8.
In Configuration -> Customer Details, "State" is set to "true"
In Configuration -> Minimum Values, "State" has a minimum value of blank (have also tried 0).
During account creation by a customer, the State field is not required (as expected, although it does have a red asterisk alongside it, as does the Post/Zip Code field, which is also not required).
If, as a customer, you subsequently edit the address you can save the updated details with the State field still blank (as expected).
However, if you, as admin, edit the address, the State field IS required.
Regards
Nick Greaves
Bookmarks