Comment 1 for bug 90824

I show this behavior as well. In my case, it appears to apply only to IMAP folders.

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Steps to Reproduce:
1. Receive a new message that is filtered (still as NEW) into an IMAP folder.
2. Open a different folder from the one containing the new message.
3. Right-click the folder containing the new message and select "Mark Folder Read"

Actual Results:
Folder is unchanged; all NEW messages inside are still NEW.

Expected Results:
All NEW messages within the folder are marked READ.
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This is on Thunderbird version 1.0 (20041206) / WinXP SP2. I also tested
filtering a NEW message to a subfolder of "Local Folders". While browsing my
IMAP account, I could right-click the local folder and successfully mark it as
read; appears to be IMAP-only.