This is the expected behavior. KNIME Server users are named users. There is no floating user license model, i.e., you can’t just remove users and add new ones.
Taken seats are freed after a certain period, but this cannot be enforced.
My recommendation to any KNIME server administrator who finds themselves in a situation like this one is to reach out to support@knime.com and we can assist you directly to fit a solution to your environment’s needs.