After spending a long time debugging Sublime Text 2, I discovered the bug is in OSX.
The Finder does not dynamically update changes in the file system for the Projects folder and subfolders.
Why not?
How to fix?
OSX 10.7.5
EDIT: To clarify, when changing the file system in the terminal (for example touch tempfile or rm tempfile), the finder window updates immediately on most folders. However, in the Projects folder, the finder window does not update.
This is a problem with Sublime Text 2 because it has a files pane that updates as the file system changes. This does not work for folders inside the Projects folder. I thought it was a bug with Sublime Text 2. But it is a bug in OSX.