Thanks for the quick response! That's really surprising that this is actually a bug AND it's over a year old. How do people use EGit then? There must be a different method to view changes in a project. Does anyone know?
In the most common case, where you want to see differences between the working directory and the Index and/or the Index and the HEAD, the Git Staging view is the most effective way to do it in my opinion. This is the case your example seems to illustrate. Personally I never use the Synchronize view for this, and none of my co-workers use it this way either.
You can use the Synchronize view for this purpose but it's more useful for something else: showing differences between the current HEAD and some other branch or reference. This an operation I don't need to do all that often and that's generally different for every invocation. So the known bug doesn't matter much to me, certainly not as much as several other long-standing bugs.
OK it's the Git Staging View that I was missing. Also, selecting Team > Synchronize Workspace is a really quick way to get the Synchronize View that I'm so used to using. The reason I'm so used to this view is that I'm a long-time Subclipse (now Subversive) user.
Thanks again for everyone's help. Very much appreciated!