When you install picons from the feeds, using the webbrowser, you are being asked where you want to store them (flash/HDD/USB) if multiple compatible devices are available. If you install them via telnet this question will be omitted, and the location will be /picon (i.e. in flash).
If you had them previously installed on the HDD this folder will still be present. The new install may be in flash, but also in the same folder on the HDD. Multiple picon folders on multiple devices may exist and work.
Having said that: having picons on the HDD is a bad idea, as that can seriously slow down the box. You'd best de-install all picons, (manually) delete the picon folders on HDD & USB, and re-install them, preferably to flash.