Formidable doesn't create duplicate posts if things are setup correctly. Formidable stores the post_id in the wp_frm_items table as part of the entry's header. That post_id is locked to that entry unless you decouple it with code. The unique value option has nothing to do with WordPress posts either. Setting a field to unique ensures that the field has a unique value across all of the form's entries. If you have 10,000 entries, that field will have 10,000 unique values. It has nothing to do with posts.

Hi Victor, thanks a lot for the prompt reply. I understand what you are saying, however for some reason on my form, when I set the action to create a post the Unique Value condition stops disabling the duplicate entry. As a result of this the, second post does have a different title and slug (It adds a -2 at the end) but the entry in the form is getting duplicate. Please refer to the snapshot attached to this comment. Thanks for taking the time to review this reply :)