I can't recall whether the sidebar icon for my home directory was preferred before or after I began using a ZEVO volume (pool/dataset gjp22) as the home.
Certainly it was present some time afterwards, mid-September 2012:

Today with ZEVO Community Edition 1.1.1 on OS X 10.8.2 I removed it from the sidebar, then realised:
- with Finder, the sidebar entry is irreplaceable.
Screen recording at http://www.wuala.com/grahamperrin/publi ... ?mode=list
I might work around by editing the relevant .plist but I'll not bother. I never use the sidebar to access the directory (prefer Command-Shift-H).
Reducing the bug
Someone might like to check whether this bug is reproducible where the home directory is a JHFS+ volume (not a subdirectory thereof).
Iconography
No problem. There's a separate topic: Folder icons.