Мы зарегистрировали FileObserver для каталога.

this.observer = new DirectoryObserver(requested.getAbsolutePath(),
        FileObserver.CREATE | FileObserver.DELETE | FileObserver.DELETE_SELF);
this.observer.startWatching();

Проверено на эмуляторе KitKat. Оболочка adb:

root@generic:/sdcard # echo "test" >> test.txt //notified CREATE
root@generic:/sdcard # rm test.txt //notified DELETE
root@generic:/sdcard # mkdir test //no events received
root@generic:/sdcard # rmdir test //no events received 

DirectoryObserver для справки

private final class DirectoryObserver extends FileObserver {

    private DirectoryObserver(String path, int mask) {
        super(path, mask);
    }

    @Override
    public void onEvent(int event, String pathString) {
        switch (event) {
            case FileObserver.DELETE_SELF:
                //do stuff
                break;

            case FileObserver.CREATE:
            case FileObserver.DELETE:
                //do stuff
                break;
        }
    }
}

Из документов

CREATE
Event type: A new file or subdirectory was created under the monitored directory 

DELETE
Event type: A file was deleted from the monitored directory 

Так что для CREATE я должен получать для файлов и каталогов и на DELETE только для файлов? Ну, я все еще неполучить CREATE для подкаталога.