The way I have things set up now, handleFolderUpdate: doesn't deal with new articles at all. The article list is only interested in the observed notification when events occur such as a purge of articles from the trash or a change in search criteria in a smart folder.
The reloading of a folder for new articles is handled by -[AppController handleRefreshStatusChange:], which only reloads the current folder if your preference is not set to mark articles read automatically.
The inspiration for this change was complaints from people who have their preference set to mark articles read automatically, as well as people who use the new unified view. Suppose that you're reading articles in the Unread Articles smart folder, or you have the folder filter set to Unread Articles. You're in the middle of reading an article, a refresh happens to occur, and the article you're reading just disappears.
If your preference is set to mark articles read after "Next Unread", then the current folder will reload after a refresh.