Sounds like its working perfectly to me.
As time passes the number of new posts is obviously going to go up as more people post - how could the number possibly go down ? (posts don't magically disappear).
How many you have responded to is completely irrelevant to this modification, this is new posts, not unread posts. The fact you have made no new posts does not matter either - other people have, it counts everyones.
Your last visit date is clearly displayed in the welcome box and only changes if you logout, or your session expires. That's standard vb functionality.
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