I'm confused, which LAN port on the modem are you connecting to?
Indeed. What the original poster describes is not the normal behaviour of a typical 'hacked' modem, which, by default, remains a modem via the LAN 1 port rather than becoming a router.
What I don't know is whether TalkTalk FTTx use PPPoE (like most other FTTx ISPs) or DHCP (as used by Sky - though Sky use particular DHCP options for authentication in an approach sometimes called MER). If TalkTalk use DHCP, that may account for DHCP traffic from the modem - but it still sounds unusual for each device to be getting an address, especially without any authentication options being passed. However, this forum post
implies TalkTalk FTTC uses DHCP without special authentication options (either by checking the traffic is from a subscriber from the information inserted into the DHCP request by the cabinet DSLAM's DHCP relay agent, or simply assuming any traffic arriving on the TalkTalk network is there legitimately). If so, that would explain the behaviour observed - TalkTalk use DHCP, so that's what is being seen through the modem.
The other possibility is that the DHCP responses are coming from the modem's LAN 2 port, which is only used for access to the modem itself in the standard 'hacked' configuration.