When choosing "change background" it would be expected the chosen directory would be traversed recursively, especially when "random" is selected, however it is not so. Please, make xfdesktop include subdirectories when "change background" is selected.
Also, if this option is implemented, the user should be able to choose a directory without selecting a file, especially when random is selected, since the root directory may be empty and it also does not make sense to force the user to select an image when it will be chosen later. I think this should be a separate bug, but I'm including it here since it's partly related to this report.
Bug 12631 - Desktop background directory won't stick
*** Bug 13673 has been marked as a duplicate of this bug. ***
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