The extension still shows top 20 articles from your home folder by default. However, when searching for something, it looks through all your folders, and lists matching articles by recency.
When searching across all folders, the name of folder is displayed under the article’s title, after the website name.
Other minor updates
When an article is removed from the list on Instapaper.com (archived / moved / deleted), the focus automatically moves to next article in the list.
Fixed some other bugs, and minor background improvements.