Set up a new hotmail account using the new Quick Setup. Uncheck the "remember password" checkbox. Then fill in all the info, and get mail. At this point i'm not sure if tb should know the password or not (since it's the same session), but at least I expect it not to know it after restart (which it does).

Had you previously saved the password, and then removed the account before recreating it? I just saw the same thing as you did, but once I removed the account (that I'd created who knows how many times before testing), the SMTP account, and both saved passwords for POP and SMTP, and tried again, we didn't remember it (in a truly terrible way, since we're bad about prompting, but at least we didn't remember it).