I agree that the current (2.1) implementation of Breadcrumbs is confusing and dysfunctional.
First off, it's not a true breadcrumb trail.
If you navigate to A then B then C then A
The breadcrumbs should be
A > B > C > A
not
A
In practice you may have to keep track of just the last 10 or so nodes and push the older ones of the trail, but it'd still make much more sense. You can just put "…" at the front of the trail after you start dropping off nodes.
It should be labeled as a Breadcrumb trail (e.g., "Your Trail:" if it stays where it is. Given it's location at the top of the screen people probably expect it to be a tree path/URL like file explorers and web browser unless indicated otherwise. Without knowing it's a trail the use of">" could suggest a tree path.
I think there should be a tree path visable at all times, as well, if URLs can't be made to do this. Although if I had my choice, I'd rather have bookmarkable URLs which indicated location (like Plone, et al). I frequently have no idea where I am and have to go view details to figure it out.