Overlapping Public Queues in TN

Hi Everyone,
A TP posts document into a folder on our server. We have a Public queue in TN which polls that directory every 15 minutes to see if there are any files in that directory and if it finds any, it picks them up, submits them to TN. After submitting it to TN it moves the file to a Good/Error folder depending on the persist error from TN.
Recently, our TP posted a very huge document into the folder, it was 87 MEGS!!! The public queue picked it up, and started submitting to TN, and it took more than 15 minutes, so it detected the file was still there, started another thread and started submitting the document to TN again. This went on until the server ran out of threads, and the server crashed.

The queue is set to run every 900 seconds and the little check box that says do not overlap tasks is checked.

Could someone explain why this could have happened?

Thank you!!