Identity has never guaranteed unique numbers, just incrementing numbers. If the identity gets reseeded, SQL will start from the given number regardless of whether that number is already in the table or not.
Identity insert also can put values in that the identity doesn't know about.
Gail Shaw
Microsoft Certified Master: SQL Server, MVP, M.Sc (Comp Sci)
SQL In The Wild: Discussions on DB performance with occasional diversions into recoverability