Why is Asana creating duplicates of subtasks already assigned to sections and tasks and re-displaying them in 'Untitled Section'?

Yeah that is how Asana currently works. In many cases having too many subtasks can get very confusing also IMO so often having separate tasks in sections works better.

In case you are interested that subtasks are automatically added to the project as well (so they show like you wanted it) I recommend upvoting here: Allow to automatically add subtasks to project