Problem solved. MySQL's MyISAM storage engine doesn't support transactions at 
all. I used Hibernate to automatically generate my schema, so it used MyISAM 
since it is the default.

I Added the following line in my.ini file inside MySQL installation to set the 
default to be InnoDB, and it solved it.

default-storage-engine=innodb

Hibernate automatic schema generation started creating tables using InnoDB, and 
atomic transactions now work.

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