asyncio doesn't kill subprocess by timeout, that's why test1() doesn't work.
The kill is done by signal sending which is asynchronous. That's why test2 may fail at "FAIL(3)" point sometimes. 
1-second sleep is enough to stop this case, but maybe not enough, say, under high load and for much more complex program than "sleep".

That's how OS works, there is nothing specific for asyncio itself.
You can observe the same using an old good sync approach, written with any programming language. 
Nothing to fix here.