Yes. Can you change that setting to "High Quality on Demand", then go to the Tools menu and purge the cache for that folder again. When you do that, all the raw files should look unedited.
Then, when you click on a file, it should appear in the Preview panel briefly looking unedited, then it should change to look edited.
I want to know if it does that, and if the change looks like the change you see in ACR.