Under certain circumstances all categories and courses are displayed in the navigation block even if "Show all courses" is explicitly disabled.

To reproduce (on a server with a lot of categories and courses, and the navigation block displayed in all courses):

• Switch navshowallcourses off
• Switch navshowcategories on
• As a user with access to courses they are not enrolled on (e.g. admin) enter one of those courses
• Observe that the "courses" node on the navigation includes not only the current course, but also a large number of other categories and courses

In this case, I would expect only the current course to be displayed under the "courses" node (maybe nested inside its category).