I was surprised when the following query was extremely slow:

SET NOCOUNT ON

WITH DoublePunches (puEmKey, puDateIn, puTimeIn, puDateOut, puTimeOut, FXCount)
AS
(
select puEmKey, puDateIn, puTimeIn, puDateOut, puTimeOut, count(*) AS FXCount
		FROM handpunch_punches 
		WHERE DelFlag = 0 
		GROUP BY puEmKey, puDateIn, puTimeIn, puDateOut, puTimeOut 
		HAVING count(*) > 1
)
, RestPunches (puKey, puEmKey, puDateIn, puTimeIn, puDateOut, puTimeOut)
AS
(
SELECT MAX(Handpunch_Punches.puKey) AS puKey,
		Handpunch_Punches.puEmKey, 
		Handpunch_Punches.puDateIn, 
		Handpunch_Punches.puTimeIn, 
		Handpunch_Punches.puDateOut, 
		Handpunch_Punches.puTimeOut
		FROM Handpunch_Punches
		JOIN DoublePunches ON Handpunch_Punches.puEmKey = DoublePunches.puEmKey
				AND Handpunch_Punches.puDateIn = DoublePunches.puDateIn
				AND Handpunch_Punches.puTimeIn = DoublePunches.puTimeIn
				AND Handpunch_Punches.puDateOut = DoublePunches.puDateOut
				AND Handpunch_Punches.puTimeOut = DoublePunches.puTimeOut
		GROUP BY Handpunch_Punches.puEmKey, Handpunch_Punches.puDateIn, Handpunch_Punches.puTimeIn, Handpunch_Punches.puDateOut, Handpunch_Punches.puTimeOut 
)

DELETE Handpunch_Punches
		FROM Handpunch_Punches
		JOIN DoublePunches ON Handpunch_Punches.puEmKey = DoublePunches.puEmKey
				AND Handpunch_Punches.puDateIn = DoublePunches.puDateIn
				AND Handpunch_Punches.puTimeIn = DoublePunches.puTimeIn
				AND Handpunch_Punches.puDateOut = DoublePunches.puDateOut
				AND Handpunch_Punches.puTimeOut = DoublePunches.puTimeOut
		WHERE NOT EXISTS(SELECT NULL FROM RestPunches WHERE RestPunches.puKey = Handpunch_Punches.puKey);

While the query using temporary tables was extremely fast:

SET NOCOUNT ON

SELECT puEmKey, puDateIn, puTimeIn, puDateOut, puTimeOut, count(*) AS FXCount
		INTO #DoublePunches
		FROM handpunch_punches 
		WHERE DelFlag = 0 
		GROUP BY puEmKey, puDateIn, puTimeIn, puDateOut, puTimeOut
		HAVING count(*) > 1

SELECT MAX(Handpunch_Punches.puKey) AS puKey,
		Handpunch_Punches.puEmKey, 
		Handpunch_Punches.puDateIn, 
		Handpunch_Punches.puTimeIn, 
		Handpunch_Punches.puDateOut, 
		Handpunch_Punches.puTimeOut
		INTO #RestPunches
		FROM Handpunch_Punches
		JOIN #DoublePunches DoublePunches ON Handpunch_Punches.puEmKey = DoublePunches.puEmKey
				AND Handpunch_Punches.puDateIn = DoublePunches.puDateIn
				AND Handpunch_Punches.puTimeIn = DoublePunches.puTimeIn
				AND Handpunch_Punches.puDateOut = DoublePunches.puDateOut
				AND Handpunch_Punches.puTimeOut = DoublePunches.puTimeOut
		GROUP BY Handpunch_Punches.puEmKey, Handpunch_Punches.puDateIn, Handpunch_Punches.puTimeIn, Handpunch_Punches.puDateOut, Handpunch_Punches.puTimeOut 

DELETE Handpunch_Punches
		FROM Handpunch_Punches
		JOIN #DoublePunches DoublePunches ON Handpunch_Punches.puEmKey = DoublePunches.puEmKey
				AND Handpunch_Punches.puDateIn = DoublePunches.puDateIn
				AND Handpunch_Punches.puTimeIn = DoublePunches.puTimeIn
				AND Handpunch_Punches.puDateOut = DoublePunches.puDateOut
				AND Handpunch_Punches.puTimeOut = DoublePunches.puTimeOut
		WHERE NOT EXISTS(SELECT NULL FROM #RestPunches RestPunches WHERE RestPunches.puKey = Handpunch_Punches.puKey);


DROP TABLE #DoublePunches
DROP TABLE #RestPunches

So either I misunderstand the purpose of WITH or there is something else I am not aware of?