We really need to either change it to Paved / Unpaved or have three categories:
-Paved
-Unpaved - Maintained
-Unpaved - Not Maintained

Most people (myself included) only want to drive on paved roads. Unless the final destination is gravel, I never want to be routed on gravel. Rock chips are expensive.

User will select the minimum road quality that they want to be routed on. I would select "Paved", in my case, and the other two road qualities will be ignored unless routing to a location on that road. In that case, it would route to the shortest distance on the low quality road.

I can't imagine that the number of people that want to be routed on dirt roads exceeds the number of people that want to only be routed on pavement. But that is just my experience in the US...could be completely different in ROW.

NOTES:
I have been routed on gravel through Waze in the past...I turned around until I found a route with no gravel...this just added time and frustration.
Some people think there is a natural speed penalty on gravel. That is not always the case, I know several people who regularly drive on gravel and they drive similar speeds as on pavement. It's all in what you are used to.

Already on the list / planned. Please see the 2013 meetup thread in the United States forum. There may be more discussion in that thread too, or search for "unpaved." I know there's been a thread or two about it already.

Nope. Sorry.

The current checkbox was a product team decision. Problem is is that in 2013, Waze told us they were going to implement it as "unpaved." The global champ community has made it very clear to Waze that pretty much every disagrees with the implementation of this checkbox, named as it is. and also based on what we've been told about the functionality of this checkbox when it comes to the app. Hopefully, they will come around and change what we have today.

Any update on when we may see this feature? This will help immeasurably in my local area.

Something new about this new checkbox in WME?
I think it should be named "Unpaved" to avoid misunderstanding.
And have a penalty in Waze app for those who check "Avoid long dirt road"

I've noticed the name is changed now.
The English UK Roadtype says Dirt/4x4 and the checkbox Unpaved.
And I think the other languages says the same except for one.
The English US Roadtype says Unpaved and the checkbox Unpaved.
Some mistake in the English US i believe.
Otherwise it seems ok. Hope to get a clarification from Waze soon.
Would like to know if there is a penalty when Unpaved is checked.

+1 for umopapisdn's suggestion. Alberta has many, many numbered (major) highways which are gravel without a yard of asphalt to be seen. They're the same width and construction/design of a paved highway, but just happen to have gravel as a surface rather than tarmac.

Same with many county roads in rural Missouri. Many are FC as primary collectors but are gravel.