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Wrap workspaces depending on the actual desktop layout:
This option does nothing. It affects neither desktop change by mouse wheel or by dragging windows from one desktop to another.
When it comes to mouse wheel behavior it is always treated as FALSE (this is appropriate in my opinion).
When it comes to dragging windows, it is always treated as TRUE (it should be treated as what actually is selected).
Wrap workspaces when the first or last workspace is reached:
This option affects only desktop change by mouse wheel. When dragging a window it always acts as FALSE. It should affect window dragging as well.
I filed this on xfwm4, since the problem seems to be prominent with window dragging, but the problem could be somewhere else.
Steps to Reproduce:
1. Check "Wrap workspaces when the first or last workspace is reached"
2. Make 3 workspaces.
3. Make a window
4. Drag the window from workspace 1 to workspace 2.
5. Drag the window from workspace 2 to workspace 3.
6. Try to drag the window directly from workspace 3 to workspace 1.
Nothing happens. Workspace doesn't switch. We remain at workspace 3.
When dragging a window off the last workspace, we should get the first workspace.
Of course, dragging windows between workspaces needs to be enabled.