The cause is likely a caching issue. The WebDAV connection is powered by PHP using the SabreDAV library.

Situation A:
Right click on opened WebDAV folder -> Click "New File".

Result: Directory listing fails to refresh.

Further inspection: Using the OSX application Coda I was connected to this WebDAV connection and when I refreshed it revealed an empty ASCII file called NewFile with no extension.

Situation B:
Right click on opened WebDAV folder -> Click "Refresh".

Result: No change. Appears to not even attempt to draw.

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Only known fix to me so far:
Right click on opened WebDAV folder -> Click View -> Toggle ('Split View' / 'View Tree').

This action appears to clear the cache.

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I mainly use OSX but I've been testing PHPed out as the only solution which does a decent job of local/remote sftp/ftp maps (bug free, w00t) and is pretty much 90% complete in it's WebDAV implementation aside from this bug. It appears to be able to edit, delete, create, etc with no problems so as long as this refresh bug is fixed I can recommend it to all the windows guys at the office.