Occasionally when I visit stackoverflow.com I see the "new favorites" alert. Clicking this takes me to the recent page where there are either no changes since my last visit or I have new reputation. Rarely are the questions I have marked as favorites actually updated.
FWIW I got the alert just now on SO, but had new rep and a new comment. Does this alert really mean "you have updates of some kind"? If so, then the subtle orange envelope suffices. If it really should indicate favorite activity then it seems a bit overzealous.