Thanks for posting, I had the same trouble after the same update. Especially annoying because I was trying to hold off on the update, but the notification window popped up in the middle of my typing and pressing the space bar, and it defaults to starting the update.
I noticed the jumping to title problem happened whenever the blue syncing arrow appeared in my note list. I followed your advice - although my options were both initially both checked. When I unchecked 'Set new note focus to title' it didn't fix it. But when I unchecked 'Create new note in a new window' the jump to title problem stopped, although it still does a weird sort of visual reset, where the context panel at the bottom of the note disappears. But thankfully the cursor focus remains where it should be.
Again, thanks very much indeed for posting the problem and solution, I went through the exact same frustration as in your first post. it was a massively annoying issue that made writing nearly impossible.