The duplicate flag (as any close flag) puts the question in the close-review queue where it is processed by users (not moderators specifically, though a moderator can do reviews in the close-queue too).
The status of the flag is decided based on the outcome of the review.
The flag was declined because three users voted "Leave Open" in the review queue as can be seen on the review-card linked to by John Ma. The three LO votes mean that the review is completed, with the outcome not in line with the flag (close as duplicate) it is thus marked declined.
This is the technical side of things. Why those users decided to vote leave open is hard to know. But in my experience the fact that something is proposed to be a closed as a duplicate (rather than for some other reasons) is something one can reasonably overlook. Thus, I'd speculate that the users just did not notice it was a vote for a duplicate and the vote to LO are against a general closure.