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By "albums" do you mean "folders containing audio files an no subfolders"?
As well, what do you use to start the dynamic playlist? A single file, a folder with no subfolders, etc?
It's really intended to prevent you from accidentally clearing your playlist that's currently in-use by tapping "select" on something while listening to music.
Has it ever given you that warning while playback is stopped? I'm not sure if it's supposed to, but I really wouldn't have expected it to.
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