We weren't actually keeping track of replaced methods, and thus were replacing every time you call addObserver:

Foundation/CPKeyValueObserving.j

@@ -295,6 +295,8 @@ var kvoNewAndOld        = CPKeyValueObservingOptionNew | CPKeyValueObservingOpti
     if ([_replacedKeys containsObject:aKey] || ![_nativeClass automaticallyNotifiesObserversForKey:aKey])
         return;
 
+    [_replacedKeys addObject:aKey];
+
     var theClass = _nativeClass,
         KVOClass = _targetObject.isa,
         capitalizedKey = aKey.charAt(0).toUpperCase() + aKey.substring(1);

Tests/Foundation/CPKVOTest.j

@@ -440,6 +440,30 @@
     [self assert:observationCount equals:3];
 }
 
+- (void)testSettersReplacedOnce
+{
+    var bob = [[PersonTester alloc] init],
+        betty = [CPObject new];
+
+    [bob addObserver:self forKeyPath:@"name" options:nil context:"testSettersReplacedOnce"];
+
+    var oldImp = class_getMethodImplementation(bob.isa, @selector(setName:));
+
+    [bob removeObserver:self forKeyPath:@"name"];
+
+    [bob addObserver:self forKeyPath:@"name" options:nil context:"testSettersReplacedOnce"];
+
+    var newImp = class_getMethodImplementation(bob.isa, @selector(setName:));
+
+    [self assertTrue:newImp === oldImp];
+
+    [bob addObserver:betty forKeyPath:@"name" options:nil context:"testSettersReplacedOnce"];
+
+    var newImp = class_getMethodImplementation(bob.isa, @selector(setName:));
+
+    [self assertTrue:newImp === oldImp];
+}
+
 - (void)observeValueForKeyPath:(CPString)aKeyPath ofObject:(id)anObject change:(CPDictionary)changes context:(id)aContext
 {
     var oldValue = [changes objectForKey:CPKeyValueChangeOldKey],