Delta Function in Two Dimensions
The problem with this question is that the radial delta function is not $\delta(r)$, where $\delta$ is the usual $1$-dimensional delta function.
An approximation of $\delta(x)$ is $ne^{-\pi n^2x^2}$, so
$$
\begin{align}
\delta(x)\,\delta(y)
&=ne^{-\pi n^2x^2}ne^{-\pi n^2y^2}\tag{1a}\\
&=n^2e^{-\pi n^2r^2}\tag{1b}
\end{align}
$$
Now, let's see what the integral of $n^2e^{-\pi n^2r^2}$ is (in polar coodinates)
$$
\begin{align}
\int_0^{2\pi}\int_0^\infty n^2e^{-\pi n^2r^2}\,r\,\mathrm{d}r\,\mathrm{d}\theta
&=\int_0^{2\pi}\int_0^\infty\frac1{2\pi}\,e^{-u}\,\mathrm{d}u\,\mathrm{d}\theta\tag{2a}\\
&=1\tag{2b}
\end{align}
$$
Explanation:
$\text{(2a)}$: $u=\pi n^2r^2$
$\text{(2b)}$: evaluate the integrals
So, it seems that $n^2e^{-\pi n^2r^2}$ is an approximation of the radial delta function. Taking the limit says that $\delta(x)\,\delta(y)$ is the radial delta function.
The Radial Delta Function is not $\boldsymbol{\delta(r)}$
However, if we use $\delta(r)$ in place of $\delta(x)\,\delta(y)$, we get
$$
\begin{align}
\int_0^{2\pi}\int_0^\infty ne^{-\pi n^2r^2}\,r\,\mathrm{d}r\,\mathrm{d}\theta
&=\int_0^{2\pi}\int_0^\infty\frac1{2\pi n}\,e^{-u}\,\mathrm{d}u\,\mathrm{d}\theta\tag{2a}\\
&=\frac1n\tag{2b}
\end{align}
$$
which tends to $0$.
The Radial Dirac Delta Function
$$
\begin{align}
\int_0^{2\pi}\int_0^\infty\overbrace{\frac{n}{\pi r}e^{-\pi n^2r^2}}^{\large\frac1{\pi r}\delta(r)}\,r\,\mathrm{d}r\,\mathrm{d}\theta
&=\int_0^{2\pi}\int_0^\infty \frac1{\pi}e^{-\pi r^2}\,\mathrm{d}r\,\mathrm{d}\theta\tag{3a}\\
&=1\tag{3b}
\end{align}
$$
Thus, the radial delta function is $\frac1{\pi r}\delta(r)$.