After some experimentation, I have discovered that the developers have been playing fast and loose with default options.
If you change 12.10 default option for Environment from count=1 back to 12.04 default value of count>0, you get the ability to select any number of files.
If you change 12.10 default option for Mimetypes from all/allfiles back to 12.04 default value of */*, you get the ability to select folders.
After some experimentation, I have discovered that the developers have been playing fast and loose with default options.
If you change 12.10 default option for Environment from count=1 back to 12.04 default value of count>0, you get the ability to select any number of files.
If you change 12.10 default option for Mimetypes from all/allfiles back to 12.04 default value of */*, you get the ability to select folders.