Well the problem is in the sort function, I just haven't have enough time to "sort" it out.

Try this for your sort function:

That way it doesn't get sorted based on the complete attribute.

So, I merged the two sortFunctions into one, but "Mark all as complete" still messes it. With this fiddle we can see what happens when #toggle-all is selected -- check the console log.

Still unable to solve this.

Justin Meyer himself gave me a very good explanation and got this issue solved right away. Now I'll do my best to explain it for you.

This is the problematic "Mark all as complete" function:

1.     '#toggle-all click': function(el, ev) {
2.         var toggle = el.prop('checked');
3.         can.each(this.options.todos, function(todo) {
4.             todo.attr('complete', toggle).save(); // See Note #1
5.         });
6.     }

Note #1: Because we are changing this.options.todos itself in this line, this triggers the sort() method (see note #2 at the bottom), which in turn changes the order of the list in a way that the next element treated by can.each() is not the one we expect it to be.

The solution is to copy the list into an array and then pass the copy to can.each(). Doing so, the array on which can.each() iterates doesn't get reordered and everything goes smoothly:

1.     '#toggle-all click': function(el, ev) {
2.         var toggle = el.prop('checked');
3.         can.each(can.makeArray(this.options.todos), function(todo) {
4.             todo.attr('complete', toggle).save();
5.         });
6.     }
7. 
   
8.     /* OR */
9. 
   
10.     '#toggle-all click': function(el, ev) {
11.         var toggle = el.prop('checked');
12.         can.each(Array.prototype.slice.call(this.options.todos, 0), function(todo) {
13.             todo.attr('complete', toggle).save();
14.         });
15.     }

Here is the working fiddle.

Note #2: As part of the architectural design of CanJS, the developers decided that any change to an attribute is caught by live-binding and acted upon immediately, without waiting for any iteration to finish. Nice choice IMO!

And here is an explanatory working fiddle. Please activate your console!

So, issue solved. Big thanks to Justin.

Nice. Thanks for sharing the explanation.