We changed the sort thing a bit and since there's no documentation yet, it's understandable that it's confusing at first. Here's how we changed sorting:
Using the options or the splitbutton in the ribbon you can setup your sort settings. By default it's Object Type then Name. I guess most are aiming for this sort order. When you use the split button to modify the sort settings, it will also automatically apply it for the current selection.
You basically set up your sort settings and everytime you click the sort button in the ribbon, current setting is applied to the folder. As before, sorting is manual. We wanted to keep the context menu as small as possible and since sorting is accessible on the ribbon we figured it's not something you use all the time like connect.
Hope this helps.