Version 10.10 fresh updates  as of 2010-7-10  with zero other changes also has 
this exact bug. 
Going into .local/share/applications/mimeapps.list and altering mime-type for 
inode/directory to nautilus.desktop  fixed the problem.
Something is changing or adding that line to that file.

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opening a directory using an application change associations incorrectly
https://bugs.launchpad.net/bugs/260492
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