Soldato
Your USB drive is only used to boot up the OS.
The OS itself and all the appdata and config files are stored on a small partition on your HDDs so if you just wiped the USB drive then it won't have affected the OS at all which is why it would remember all your settings.
If that's the case, can I presumably just use a newer image on my USB boot drive which will enable me to upgrade DSM to the latester version?