As someone who uses TFS occasionally, the ‘get latest’ functionality has always seemed frustrating. So I did a quick bit of research, and think this is a useful note to leave here for my future self: Why doesn't TFS get latest get the latest?
TFS redefined what "Get Latest" does. In TFS terms, Get Latest means get the latest version of the files, but ignore the ones that the server thinks is already in your workspace. Which to me and just about everyone else on the planet is wrong.
See this link: http://blogs.microsoft.co.il/blogs/srlteam/archive/2009/04/13/how-get-latest-version-really-works.aspx
The only way to get it to do what you want is to Get Specific Version, then check both of the "Overwrite ..." boxes.