How are the timeout IDs allocated?

Surely you're just dumping the memory usage before you remove the timer?

var btnPin = BTN;
var ledPin = LED1;
var ledTimer = null;
digitalWrite(ledPin, 0);
var btnWatcher = setWatch(function () {
  console.log("--" + process.memory().usage); // <------------------------------
  if (ledTimer) {
    clearTimeout(ledTimer);
    ledTimer = null;
  }
  digitalWrite(ledPin, 1);
  console.log("before: " + ledTimer);
  ledTimer = setTimeout(function () {
    digitalWrite(ledPin, 0);
    ledTimer = null;
  }, 4000);
  console.log("after: " + ledTimer);
}, btnPin, {repeat: true, edge: "rising", debounce: 70});

--79
before: null
after: 2
--106
before: null
after: 4
--107
before: null
after: 6
--107
before: null
after: 8

Try this:

var btnPin = BTN;
var ledPin = LED1;
var ledTimer = null;
digitalWrite(ledPin, 0);
var btnWatcher = setWatch(function () {  
  if (ledTimer) {
    clearTimeout(ledTimer);
    ledTimer = null;
  }
  console.log("--" + process.memory().usage); // <------------------------------
  digitalWrite(ledPin, 1);
  console.log("before: " + ledTimer);
  ledTimer = setTimeout(function () {
    digitalWrite(ledPin, 0);
    ledTimer = null;
  }, 4000);
  console.log("after: " + ledTimer);
}, btnPin, {repeat: true, edge: "rising", debounce: 70});

--79
before: null
after: 2
--80
before: null
after: 4
--80
before: null
after: 6
--80
before: null
after: 8
--80
before: null
after: 10