This isn't a bug in the screensaver. It's actually designed to work
that way :) It's just a configuration option that hasn't been well
documented.
** Changed in: gnome-screensaver (Ubuntu)
Status: Triaged => Invalid
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[gutsy] "Pictures folder" shows all pictures in $HOME
https://bugs.launchpad.net/bugs/145152
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Desktop Bugs, which is the registrant for gnome-screensaver.
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