I have a cleric with the Sun domain which means he gets Searing Light as a level 2 spell. If I slot searing light to be memorized, it reduces the number of times I can cast Cure Moderate Wounds spontaneously equal to the number of times I have Searing Light memorized.

So if I have 4 slots and 1 is taken by Searing Light, then I can only cast Cure Moderate 3 times.

Is this a bug or deliberate? The way I see it is no matter what spells I have memorized, I should be able to cast Cure Moderate a max of 4 times.

as far as I know this isn't a bug. Officially clerics receive one spell slot that is devoted to a domain spell for the spell level at which they receive that spell.

So in your example, you receive 3 normal slots at level 2 and one bonus level 2 spell slot that ideally is devoted to casting Searing Light as a special bonus blessing that serving your particular deity provides. Hence it cannot be sacrificed for spontaneous healing as in many ways it is a special ability and not a normal blessing like your other spell slots.

In Nwn however, I believe that you don't -have- to use that slot to memorise your domain spell. Which means you can have 4 spontaneous casts if you don't memorise your domain spells... and I'm pretty sure most people have done this at some stage. But I kind of feel it should be pointed out that Clerics should (but don't have to) keep one spell slot devoted to their domain spell to signify its special ability status.

Not a bug.

Just for future reference, clerics who memorize domain-specific spells can't use that slot for spontaneous casting of either healing or inflict spells.