The large-scale reorganization of deep-ocean circulation in the Atlantic involving changes in North Atlantic Deep Water (NADW) and Antarctic Bottom Water (AABW) played a critical role in regulating hemispheric and global climate during the last deglaciation. However, changes in the relative contributions of NADW and AABW and their properties are poorly constrained by marine records, including δ18O of benthic foraminiferal calcite (δ18Oc). Here we use an isotope-enabled ocean general circulation model with realistic geometry and forcing conditions to simulate the deglacial water mass and δ18O evolution. Model results suggest that in response to North Atlantic freshwater forcing during the early phase of the last deglaciation, NADW nearly collapses while AABW mildly weakens. Rather than reflecting changes in NADW or AABW properties due to freshwater input as suggested previously, the observed phasing difference of deep δ18Oc likely reflects early warming of the deep northern North Atlantic by ~1.4°C while deep Southern Ocean temperature remains largely unchanged. We propose a thermodynamic mechanism to explain the early warming in the North Atlantic, featuring a strong mid-depth warming and enhanced downward heat flux via vertical mixing. Our results emphasize that the way ocean circulation affects heat, a dynamic tracer, is considerably different than how it affects passive tracers like δ18O, and call for caution when inferring water mass changes from δ18Oc records while assuming uniform changes in deep temperatures.