I assume this is a bug, but article permalinks on the 'Read More' buttons/links at the bottom of excerpts when "Display Full Posts" is disabled on the homepage are 'followed'. Because they do not include key phrases or relevant, they leak 'link juice' and can degrade SEO. Possible solutions:
1. Automatically rel="nofollow" Read More buttons/links 2. Allow rel="nofollow" to be enabled/disabled for them in the options menu 3. Add an option to dynamically generate title/keyphrase text on the button in addition to the static text choice already available (Read More), i.e. "Continue reading %posttitle%" or "Read More About %keyphrase%"
Automatically using rel="nofollow" on the Read More permalinks would likely be the easiest solution to implement. I attempted to add it into loop.php, but it wasn't showing up on the page...may have to dig around a bit more.
Its not so much a bug as as much as along the lines that in respect of SEO, we have not built the function into the theme. We always preferred to let all these functions be handled by a 3rd party plugin, but we will examine the feasibility of implementing this.