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Is this a Linux OS behavior - you can copy/move a file while it is still being transferred? Or is this the PureFTP server issue?
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It's a Linux OS behavior. You can move/rename/delete/blow up files while they are in use. In fact I _REALLY_ like this behavior.

I agree that in your case it is somewhat an headache... I am not aware of any function in pure-ftpd that would prevent users to download files that are being uploaded (but take a look at their documentation/forum just in case). However, it is possible to run a script after an upload/download in pure-ftpd. You could use this to change the right/owership of a file or to move the file somewhere else maybe??