Incorporated the two suggestions (h5 and named variables) and fixed the Spinach test.

app/views/milestones/_issues.html.haml

 .span6
   .ui-box.milestone-issue-filter
-    .title
-      %ul.nav.nav-pills
-        %li=issues.first
+    %h5.title= title
     %ul.well-list
-      - issues.second.each do |issue|
+      - issues.each do |issue|
         %li{data: {closed: issue.closed?}}
           = link_to [@project, issue] do
             %span.badge.badge-info ##{issue.id}

app/views/milestones/show.html.haml

@@ -56,9 +56,9 @@
 .row
-  =render(:partial => 'issues', :object => ['Unstarted Issues (open and unassigned)', @issues.opened.unassigned])
-  =render(:partial => 'issues', :object => ['Ongoing Issues (open and assigned) ', @issues.opened.assigned])
+  =render(partial: 'issues', :locals => {title: 'Unstarted Issues (open and unassigned)', issues: @issues.opened.unassigned})
+  =render(partial: 'issues', :locals => {title: 'Ongoing Issues (open and assigned)', issues: @issues.opened.assigned})
 .row
   .span6
@@ -75,7 +75,7 @@
             –
             = link_to_gfm truncate(merge_request.title, length: 60), [@project, merge_request]
-  =render(:partial => 'issues', :object => ['Completed Issues (closed)', @issues.closed])
+  =render(:partial => 'issues', :locals => {title: 'Completed Issues (closed)', issues: @issues.closed})
 %hr
 %h6 Participants:

features/project/issues/milestones.feature

@@ -22,5 +22,3 @@ Feature: Project Milestones
     Given the milestone has open and closed issues
     And I click link "v2.2"
     Then I should see 3 issues
-    When I click link "All Issues"
-    Then I should see 4 issues

features/steps/project/project_milestones.rb

@@ -51,11 +51,5 @@ class ProjectMilestones < Spinach::FeatureSteps
   Then "I should see 3 issues" do
     page.should have_selector('.milestone-issue-filter .well-list li', count: 4)
-    page.should have_selector('.milestone-issue-filter .well-list li.hide', count: 1)
-  end
-
-  Then "I should see 4 issues" do
-    page.should have_selector('.milestone-issue-filter .well-list li', count: 4)
-    page.should_not have_selector('.milestone-issue-filter .well-list li.hide')
   end
 end