So to summarize...
When you set the "Show the last" setting in the "Tools, Options, Display" dialog or in a individual Channel's "Properties, Channel" dialog to a value such as 20, Awasu will still add all new feed items to it's archive database, but will only display the newest 20 items based upon this setting.
So nothing is really "lost", but you may not see all items due to the above setting.
Hopefully I'm on the right track with that summary.
Now personally I don't have the "Show the last" setting on at the global level and I've only set it on a few individual Channels. Instead I use the "New content", "Unread items" and "All" Channel Filters to limit/expand the number of Channels/feed items that I see.
I'll typically start with the "New content" Channel Filter, and read only from the Channels that have new content, then I'll switch to the "Unread items" Channel Filter and read from the Channels that have unread items. I've mapped the "Mark all as read" command to the F12 key, so when I'm reading from a Channel I'll usually scan all the headlines, read the ones I care about or send them to a Workpad (to read them later) and then I'll mark the whole Channel as read, by pressing F12.
This may not help anyone but that's my primary non-Search Channel
: Search Channels