Strange Problems Copying Files From W2K3 to W2K

One of my developers is reporting a problem that happens when he is trying
to copy a read-only file to a share from a W2K3 server to a W2K file server.

For example, a command like:

copy /Y SomeReadOnlyFile.ext \\my-server1\myshare\SomeReadOnlyFile.ext

has the following results:

(a) if the target file does not exist, the command succeeds, and the created
target file has read-only attribute;

(b) if the target file exists and is not read-only, the command fails (with
"Access is denied" diagnostics) and the target file has read-only attribute
and is truncated to zero;

(c) if the target file exists and is read-only, the command fails (with
"Access is denied" diagnostics).

The behaviour in case (c) is normal; in cases (a) and (b) - it isn't.

To compare, this is what happens when we run similar commands against
another Windows 2000 or Windows 2003 file server:

(a) if the target file does not exist, the command succeeds, and the created
target file does not have read-only attribute;

(b) if the target file exists and is not read-only, the command succeeds and
the target file does not have read-only attribute;

(c) if the target file exists and is read-only, the command fails (with
"Access is denied" diagnostics).

The first observation here is that the problem file server is attempting to
preserve the read only attribute, whereas the other servers do not. What
security policy setting causes that behavior on the server?

Once I know what setting causes this behavior, I will go turn it on the
other servers where copy is working and see if we can duplicate the issue.
Perhaps the issue is specific to W2K3 clients interacting to W2K servers.

Is the behavior reported above documented, and if yes is there a workaround?

--
Will