Folder Matching Failure

I have a rule that monitors a folder hierarchy for changes and if there are changes it kicks off a shell script which runs an rsync command.
The rule has a delay built into it so that when a new file is created it doesn't trigger on the basis of untitled.md for instance, but gives you time to name the file.
If I check whether the rule is matching it matches. If I pick Run Rules Now it runs and does what is expected with the shell script. However if left running it never matches and therefore never runs the script!!

I've wracked my brain trying to work out what's going on...but I'm stumped.
Can anyone give me a pointer?
The rule has a delay built into it so that when a new file is created it doesn't trigger on the basis of untitled.md for instance, but gives you time to name the file.
If I check whether the rule is matching it matches. If I pick Run Rules Now it runs and does what is expected with the shell script. However if left running it never matches and therefore never runs the script!!

I've wracked my brain trying to work out what's going on...but I'm stumped.
Can anyone give me a pointer?