That problem is related to the fact that Circles can be both used as (1)a privacy group of people to which you push stuff and (2)a filter for content published

That problem is related to the fact that Circles can be both used as (1)a privacy group of people to which you push stuff and (2)a filter for content published from that same group. To avoid this kind of confusion maybe Google should separate those uses more clearly or just drop (2) altogether. Another way out for (2) would be doing some kind of circle matching: if someone has shared something with you and a circle very similar to your "Close Friends", it should show on the filter for that circle, if not matched to any circle it should go to a 'general' stream.