On my Windows 7 system, I can sort manually without a problem.
My contextual menus don't show the caption "Sort Fence by" like yours, just "Sort by" instead. It looks like Fences is not taking over the desktop behavior completely. This contextual menu is the same no matter I left-click the desktop or the fence itself:
Just curious when you saved your layout did you make sure you save it to a specific name instead on just date. If it just date, it will probably be overwritten.
If you mean "layout snapshots"...
I use numbers: "1", "2", etc. ALso tried with alphanumeric names, but the result is the same.