Hi Matt,
PI detectors are very good at rejecting foil because of the delay between the transmitter switch off and the receiver sampling the return signal. Obviously, if this delay is reduced, then progressively smaller and thinner pieces of foil will be detected. However, there is a very rapid decline in foil sensitivity when the decaying signal of the foil becomes equal to, or shorter than the sampling pulse delay.
The XL500 in its initial form had a minimum delay of 60uS, which would have rendered it very insensitive to foil. The main purpose, however, was to make it insensitive to the conductivity effects of sea water when diving. This delay may have been shortened in later models, but no less than 30uS, I would guess.
As you have experienced, the XL500 could still detect a wide range of gold jewellery, even with delay times which seem long today. The limitation today, though, for a diving machine in salt water, would still be about 30uS, depending on the coil size. Future coil design and "water balancing" technology may be able to improve on the foregoing figure. I'm sure that a lot of smaller gold objects are still hidden on Plate Fleet wreck sites because they can't be found with standard PI detectors.
Eric.