This is very similar using Windows 10:
After Windows update the Show desktop icons at startup can get out of synch in Fences 3.
Right click Windows desktop, click view, Show desktop icons (always unchecked at startup)
To get back in synch:
Go into Fences, Quick hide and turn off any hide options.
Be sure that Always show icons at startup is checked.
Even if Quick hide is disabled the settings may have to be written to disk
I noticed double-clicking Windows desktop worked 1-time to show desktop icons.
I had Quick hide disabled and changing settings and rebooting got it back in synch.
The Always show icons at startup may or may not work even when Quick hide is disabled.
I will test this after saving this post. Anyway, this worked for me 8/11/2011.