Updating Smart Group with Search Builder results in listing all contacts on Group Membership page

Smart groups appear to work as God intended when using "Advanced Search," but:

Go to "Search Builder".

Choose criteria, for instance "Individual, Tag(s) = 5"

Search, and then in - more actions - (i did not select either "selected" or "all" contacts), New Smart Group.

Save it and you should have a nice result like this.

CRM-303-Builder (smart group) - Found 32 group members

• Tagged = Volunteer ... AND ...
• Contact Type - 'Individual'

But when you go to Manage Groups > CRM-303-Builder Members

You get a list of everybody-- all 316 contacts in this case.

http://demo.civicrm.org/drupal/civicrm/group/search?reset=1&force=1&context=smog&gid=10

I fix would be greatly appreciated!

Confirmed on 1.6.8058, 1.6.8022, 1.6.8061, and 1.6.8069.

All right, so I'm actually just really hoping it can be resolved in two hours...