This is a few weeks late, because I use the groovy Greasemonkey script that saves a person from the old “Mark All As Read” gotchas (1, 2, 3, and 4) in Google Reader, but it seems Google actually took steps to defang this disaster waiting to happen.
“This dialog box doesn’t show up every time, but only if you’re marking 50 or more posts as read. We chose this as a balance between helping people avoid accidentally losing large amounts of unread items, while not being so intrusive as to interrupt people on every single mark-all-as-read action. Thanks for your feedback on it, though. We appreciate hearing what folks think about features and changes so we can keep iterating and improving.
Source here. [This change was coincident with the new favicon, which I did notice. Old: New: ]