Yes, that was intentional.

(Otherwise I could / would have tried to implement it differently.)
I thought it would be nice to have a production chain that works a bit differently.
Also otherwise milk production would have been a bit underwhelming (because milk is not that valuable by itself).
From what I heard, it is a mechanic most players like.
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My explanation:
The milk maid is simply taking care of the livestock.
This produces milk, but the livestock will also still breed in the stable.
From my experience:
Milking a cow will not kill it. Unless of course you do it very rude ...
And also livestock will not stop breeding in a stable. Quite the contrary.
Especially if you treat it well, it may like it even more than in the wild.
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A lot of mechanics are a bit
abstract in Civ4Col / WTP.
Especially the production chains are quite abstract / simplified.
Some imagine that the "Milkmaid" somehow
consumes the livestock.
For me however it is simply that the milkmaid
works to milk and breed the livestock.
Sure, I could also have implemented that
Food would be consumed as well.
But when thinking about it, I felt it would only make this production chain tedious and thus ruin some fun.
Everything you do as a game designer is a
compromise of these 3 dimensions:
Effort vs. realism vs. fun gameplay.
I decided in this case to optimize for effort and fun gameplay.
Others might decide to optimize for realism.
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Summary:
For me it was intentional, that production bonus of Milkmaids does also "breed" the livestock.
Removing this would in my opinion eradicate what is special about this production chain.
If the remaining team wants to implement it differently now, that is also fine for me of course.

(e.g. I would have no problem if e.g. also a bit of
Food was consumed.)