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OK, this is so goofy, I have to mention it, but I don't expect the XFCE devs to actually "fix it".
I'm using ArchLinux, and I've been using the XFCE desktop for years (works great! thanks!), but I recently installed the KDE Plasma desktop so I could experiment with Wayland (I also installed software to try out XFCE Wayland). Yesterday while running pacman updates, the KDE Plasma software was updated. After that when I double clicked on a desktop folder, it launched Dolphin, the KDE file manager. I looked in vain to figure out what setting had changed in XFCE, but finally gave up. So I logged out of XFCE and logged into KDE Plasma, and double clicked on a desktop folder, and Thunar launched! That I was able to fix in KDE System Settings.
Here's where it gets weird. So I log out of KDE Plasma, and log back into XFCE. I double click on a desktop folder, and Thunar launches! So changing a setting in KDE fixed the problem in XFCE. I know there's a reason for this, and I'm sure I'll figure it out sooner or later.
And a quick report -
LightDM seems to work great for launching both XFCE and KDE in both X and Wayland sessions.
XFCE Wayland has a ways to go. The XFCE 4.20 Release blog note covers very well what's working, and what's not working.
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