Java has got nothing to do with this issue.
I run Subsonic on Windows Server 2008 on a Virtual Machine.
I have all my music in a folder called Media Which is an UNC-path. (\\storage\Media)
Whenever I add a new artist or an album from an existing artist, Subsonic has no difficulties picking up any changes.
I don't update my server nor Java as I should be, but I have no issues running Subsonic.
So I don't know what your folder structure is, but there must be a problem there.