If you have this option enabled, it unfortunately doesn’t count ‘in progress’ as unwatched, and focuses next unwatched item 
As I found out when starting first unwatched show only to see spoiler of episode that I hadn’t completed previously (ie. in progress).
I know in progress can have been restarted and already watched, but then kodi has play count for this, ie. count > 1 = watched (although this doesn’t account for misuse, but then resetting something ‘unwatched’ should reset play count imho).
/regards 