Desktop shortcut not getting created with XDG_DESKTOP_DIR set

[den-commits]

The "Add Desktop shortcut to this device" option does not seem to work even with environment variable XDG_DESKTOP_DIR set manually to the Desktop folder:

I also tried setting the other variable mentioned, XDG_CONFIG_HOME, which had no effect. Tried directories other than "Desktop" as well. I don't receive any errors, it just says successful and seemingly nothing happens like mentioned in FAQ#4.

Using the most recent flatpak version.