Why did the borg let 7 of 9's develop/let her keep them?

Being imilated does not prevent the host body from developing as it would naturally do. Annika (or however you spell it) was a human girl. The implants would not block the development of physical components (though they obviously can since her hair was shortened somewhere along the line and stayed that way), unless there is a specific reason for it, and if the Borg are even aware of s they clearly don't see them as an impediment.