There is no setting on the server to retain mail. That is a POP3 client feature. The client program remembers the message IDs it downloaded and next time just asks the server for anything it does not have yet.
It could still be the duplicate message bug mentioned by altmann (although I think that applies in the situation where you wanted it deleted from the server but it did not do that), but you mentioned TB was used to siphon mail from another PC. That sounds like this is the first time Outlook was used on this PC? If so, it would have no idea that all that mail had already been downloaded. If not, its "memory" somehow was corrupted.
I don't know of any methods to initialize or restore the message index in Outlook if it could not import it from TB. Is a switch to IMAP4 possible? That would at least save you the download of all message bodies.