Hello Richard, this feature is the main reason why the application association was altogether removed from version 3.
Version 3.5 is an attempt to partially bring the feature back, but in a reverse way: instead application launch triggering folder unlock, now the folder unlock triggers application launch. It is not the same thing, for sure, but it still saves some clicks.
We cannot hook early enough in the logon process to stop launching apps marked for auto open, and unlock folder first, so this is the best way we can do.
If you like and want to use the Apple's application reopen feature upon logon, then you should not protect application folders.
Let me know if you have further questions.
Rgds
Zsolt