I will focus on only one issue raised in the OP, namely, why MA produces the $\pi/2$ result. I avoid on purpose any discussion on the mathematical justification of the integrals as I think this
I have never seen double integrals of distributions over bounded sets
in math literature and don't know any definitions of such integrals. I
would be very thankful for accessible and serious references.
goes beyond the scope of this forum. Coming back to this integral:
Integrate[DiracDelta[1 - x^2 - y^2], {x, -1, 1}, {y, -1, 1}]
1. Mathematica treats it as an iterated integral. Thus, it is sufficient to consider only the inner integral
Integrate[DiracDelta[1 - x^2 - y^2], {x, -1, 1}]
producing a wrong answer
(* ConditionalExpression[Boole[-1 < -Sqrt[1 - y^2] < 1]/(2 Sqrt[Abs[1 - y^2]]), -1 < Sqrt[1 - y^2] < 1] *)
2. The correct answer can obtained by the integration in the limits $[-a,a]$
z=Integrate[DiracDelta[1 - x^2 - y^2], {x, -a, a}]
(*(Boole[-a < -Sqrt[1 - y^2] < a || a < -Sqrt[1 - y^2] < -a] + Boole[-a < Sqrt[1 - y^2] < a || a < Sqrt[1 - y^2] < -a])/(2 Sqrt[Abs[1 - y^2]])*)
and setting $a=1$ (no limit is necessary)
z1=z/.{a->1};
Integrate[z1, {y, -1, 1}]
(* π *)
3. Alternatively we can FullSimplify
the intermediate result
za=FullSimplify[z, Assumptions -> a > 0 && -1 <= y <= 1]
(* Boole[Sqrt[1 - y^2] < a]/Sqrt[1 - y^2] *)
Integration over y
can be performed in full generality
Integrate[Boole[Sqrt[1 - y^2] < a]/Sqrt[1 - y^2], {y, -1, 1}]
$$\begin{array}{cc}
\Bigg\{ &
\begin{array}{cc}
\pi & a>1 \\
2 \sin ^{-1}(a) & 0<a\leq 1 \\
\end{array}
\\
\end{array} \tag{1}$$
Conclusion The reason for the $\pi/2$ answer seems to be that mathematica forgot one root of the
$$1-x^2-y^2=0 \tag{2}$$
equation. It certainly knows how to perform integrals of the $\delta$-function of a function
$$
\int\delta(f(x))\,dx=\int \sum_k\frac{\delta(x-\alpha_k)}{\left|f'(\alpha_k)\right|}\,dx\tag{3}
$$
where $\alpha_k$ are the real roots of $f(x)=0$, however, in the OP example $a=1$ it misses one root and does not miss it otherwise.
It has been suggested by other answers that because the circle touches the boundaries of the integration domain this should somehow influence the result. It should not because these are points of measure zero: integration domain is $2D$, $\delta$-function cuts out a $1D$ manifold out of it, whereas ill-defined integrand is on the $0D$ manifold. This seems to be just a coincidence that for $a=1$ mathematica misses one root of (3).
Integrate[DiracDelta[1 - Sqrt[x^2 + y^2]], {x, -1, 1}, {y, -1, 1}]
yields π $\endgroup$