In continuous focus mode, it works as I expect. It continuously focuses and does so correctly. My problem does not happen for every subject but for certain subject and perhaps situations, it happens consistently. (very annoying) I am not able to recreate it on demand.
I am familiar with the statement made on page 68 of the manual. I am thinking, even though the subject is not moving, maybe camera thinks it is moving.... and in conjunction with the fact I AM moving the camera, it gets confused. I am not sure if there is a motion censor involved in later bodies to prevent this behavior in case of re-composition moves. It would be very nice if I can disable this.
One situation I noticed is that say I am taking a portrait of a person. Focus on the eye, press down half way and recompose so that the focus point is not on the face. It refocuses.