Flow: that behavior is correct and indeed common to all filesystems I'm aware of for performance/scaling reasons. Taken to the extreme if every file modification anywhere was propagated up to the root directory it would immediately become a point of contention which would affect system performance dramatically.
On the other hand, this is an FTP and not a general purpose filesystem. I've toyed with schemes to track the total size of a directory (the whole directory tree) and stuff like that but it would be better off as a feature on a newly designed server...
However, I hinted at a potential solution to what you want when I wrote the comments for v6.6! Just write a custom /Search module! You can extract the latest entries to the dupelog, or search backwards for directory creation events in the ioFTPD.log file and return them as a response to /search/[latest-20] query or something that can be setup by creating a symbolic link using a name like [Latest] or something...
The dynamic virtual directory feature is really pretty powerful and I'm hoping some script writers really find creative uses for it.