It all started with those lines in defaultIndexConfiguration from Sitecore.ContentSearch.Lucene.DefaultIndexConfiguration.config:

<!-- If no configuration is specified for an index, it uses the default configuration. The configurations are not merged if the index also has a configuration. The system uses either the default configuration or the index configuration. -->
This setting allows you to exclude items that are based on a specific template.-->
<exclude hint="list:ExcludeTemplate">

So when I setup custom index for Sitecore, I created a new index configuration like this:

<configuration xmlns:patch="">
        <primaryluceneconfiguration type="Sitecore.ContentSearch.LuceneProvider.LuceneIndexConfiguration, Sitecore.ContentSearch.LuceneProvider">
          <include hint="list:IncludeTemplate">

Then I set this configuration for our index:

<configuration xmlns:patch="">
      <configuration type="Sitecore.ContentSearch.LuceneProvider.LuceneSearchConfiguration, Sitecore.ContentSearch.LuceneProvider">
        <indexes hint="list:AddIndex">
          <index id="Primary Site Search" type="Sitecore.ContentSearch.LuceneProvider.LuceneIndex, Sitecore.ContentSearch.LuceneProvider">
            <param desc="name">$(id)</param>
            <param desc="folder">$(id)</param>
            <param desc="propertyStore" ref="contentSearch/databasePropertyStore" param1="$(id)" />
            <configuration ref="primary/PrimaryLuceneConfiguration" />

Everything works fine, but here comes the issue, in Crawling.log.xxxx.txt log files. I got this warning
"XXXX 22:05:53 WARN You have specified both IncludeTemplates and ExcludeTemplates. This logic is not supported. Exclude templates will be ignored."
for every item that it indexes.
If I remove the node <exclude hint="list:ExcludeTemplate"> from the defaultIndexConfiguration, the warnings are gone.
Just don't understand why the excludes from the defaultconfiguration still affects my custom index when I have a complete different new index configuration.
Anyway, still trying to figure out what's wrong, will update if I have new findings.
Sitecore version: Sitecore.NET 7.1 (rev. 140324)