ANSI_WARNINGS off, deny permissions = transaction killed - Why?

When ANSI_WARNINGS are ON and an insert fails due to permissions being denied, a transaction continues.

When ANSI_WARNINGS are OFF and an insert fails due to permissions being denied, a transaction is aborted.

In all my reading of the ANSI_WARNINGS documentation, I don't see anything that describes this behavior. Could someone please explain this?

Code to reproduce:

--------do this as sa--------- 
CREATE TABLE Junk( Name varchar(12) ) 
INSERT INTO Junk(Name) VALUES ('original') 
DENY INSERT ON Junk to dbUser
--------------------------------- 

---now do this as dbUser (update is not attempted)--- 
SET ANSI_WARNINGS OFF
BEGIN TRAN 
INSERT INTO Junk(Name) VALUES ('new') 
update Junk SET Name = 'updated' where Name = 'original' 
COMMIT TRAN 
-------------------------------- 

---again as dbUser, do this (update is done)---- 
SET ANSI_WARNINGS ON 
BEGIN TRAN 
INSERT INTO Junk(Name) VALUES ('new') 
update Junk SET Name = 'updated' where Name = 'original' 
COMMIT TRAN 
-----------------------------