You can manager your 'Watch' folders by opening PhotoShow and clicking on the 'Preferences' link. There you will be able to select your 'Watch' folders. Please note that there is not a way to turn the off the 'Watch' function for the Home Photos folder.
However, because the program is accessing the photos in this folder, it will not be making duplicates of these images. A duplicate will only be created if you import a photo into PhotoShow from another folder.