Ok so I just initialized my ipod AFTER installing 522. Performed a sync of 5920 files (using cache converted files, much faster). The Artwork folder shows:
ArtworkDB 3,630KB
F1055_1.ithmb 15,040KB
F1060_1.ithmb 94,000KB
F1061_1.ithmb 2,828KB
I made the mistake of sync'ing my entire collection on the first sync. So I did a second sync that actually removed some tracks. Checked artwork after this sync, all was fine.
Then sync'd back what was removed. And boom, all coverart is now set to a Black Flag album.
ArtworkDB 3,694KB
F1055_1.ithmb 1,728KB
F1060_1.ithmb 97,800KB
F1061_1.ithmb 3,056KB
F1068_1.ithmb 1,728KB