Good call, Bain. The login system attempts to re-use inactive accounts in order to cut down on clutter. If you register an account multiple times using the same name, email, etc. without activating, it will just overwrite a previous registration.
Later, after I started getting a bunch of name deletion requests, I wanted to be able to keep a record of who had used what name, so I added an inactive/deleted name system. I did not, however, revisit the account creation logic, so when it checked if a name could be used, and if it already existed, it assumed the whole account was inactive and re-used it. This should be fixed now.