Can please someone explain this in detail?

[1PFYcabWEwZFm2Ez5LGTx3ftz]

I had 1.017 BTC in my address (1PFY). I tried sending myself 0.016 BTC. My balance (in bitcoin client) remained unchanged, I only got deducted 0,0005 fee.
When I checked the transaction on blockchain https://blockchain.info/tx/17eb405848335fd0868cef07355c736d65e51a66923c16a6421e3aa230a4bd3c
I expected to see a payment from my address (1PFY) to the same address (1PFY). However a strange thing has happened - there was a second address created (13yv) on the moment of transaction, and 0.016 BTC got stored in my old address (1PFY), and the rest (1.017 - 0.016 = 0.98381766 BTC) in the new (13yv) address.

Can anyone explain what exactly has happened and why?

[AsymmetricInformation]

Client auto-creates new addresses (called "change addresses") for every transaction to avoid re-using address and help you maintain anonymity.

Each address has its own private key required to spend the address' funds!!
Make sure you are using deterministic wallets!
Or backup wallet.dat frequently!
Otherwise you may lose money!

[1PFYcabWEwZFm2Ez5LGTx3ftz]

Client auto-creates new addresses (called "change addresses") for every transaction to avoid re-using address and help you maintain anonymity.

Each address has its own private key required to spend the address' funds!!
Make sure you are using deterministic wallets!
Or backup wallet.dat frequently!
Otherwise you may lose money!

Thank you for answer! So this would invalidate a paper wallet? Or I would have to do 99 more transactions for paper wallet to become invalid?

[AsymmetricInformation]

Client auto-creates new addresses (called "change addresses") for every transaction to avoid re-using address and help you maintain anonymity.

Each address has its own private key required to spend the address' funds!!
Make sure you are using deterministic wallets!
Or backup wallet.dat frequently!
Otherwise you may lose money!

Thank you for answer! So this would invalidate a paper wallet?

No problem.  Armory and Electrum use a "seed", which might look like a private key, but is actually a number used to deterministically generate a sequence of private keys.

So Armory's paper wallets are perfectly fine, as would be an Electrum brainwallet (you could write down the 12 word phrase to make a brainwallet a paper wallet).

https://en.bitcoin.it/wiki/Electrum/Documentation#What_is_a_.22Deterministic_Wallet.22_in_Electrum.3F

[1PFYcabWEwZFm2Ez5LGTx3ftz]

And what if I use bitcoin-QT wallet? Would a paper backup of such wallet become invalid instantly, or only after 99 more transactions?

[grue]

And what if I use bitcoin-QT wallet? Would a paper backup of such wallet become invalid instantly, or only after 99 more transactions?

your key pool is at 100 keys. once you run out of new keys, an additional 100 keys is added to the key pool. it's not currently possible to tell how many keys are left in the pool, but you can refill the pool buy using rpc commands.

[dserrano5]

And what if I use bitcoin-QT wallet? Would a paper backup of such wallet become invalid instantly, or only after 99 more transactions?

You paper wallet contains (or may contain) one private key, corresponding to address A. If you send the funds at that address to another address B, and the change is sent to address C, then the paper wallet is rendered useless. If you send the funds at that address to another address B, and the change is sent to address A, then you keep the rest of the funds.