I am using V2.2 . I had not tested / noticed the 'on checkout their basket is emptied' scenario, but none the less I would rather just get rid of their basket contents asap so to not have a frustrated customer realizing only when they get to checkout that their basket is now cleared. But please if you do have further thoughts on this please do let me know.
I hear what your saying but it is design to kill and current session when the customer checks the order status from there email. If they have and item in the cart or not it still is going to kill there session from the email order status.

Re my 2nd question, from what I understand, If you are logged into your account you do not have the COWOA function (for obvious reasons), but what if I am not logged in and thus I am able to use COWOA and use the same email address already registered (but not logged into of course), is it possible to be prompt/notified to use another address as the system has already got this email address registered?
I would assume they would understand the warning message if they already have a full account with your shop. The warning message is.....

Our system already has a record of that email address - please try logging in with that email address. If you do not use that address any longer you can correct it in the My Account area.

And Re my 3rd Question... not sure why I asked it. As the name says Checkout WITHOUT an Account, so as far as a customer is aware, they don't have any history saved anyway.
As far as they are ware they don't..