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Everything in the "Configure Desktop and Wallpaper" window, aka the "Desktop Folder Settings - Plasma" window, seems to apply to the entire current activity and current physical display. It is NOT, as its name would suggest, limited to the current virtual desktop or the desktop file folder.
I think changing the name to "Configure Activity and Wallpaper" makes things clearer about where the settings will take effect.

Furthermore, it would make sense to give the "Activity Settings" dialog box a new home as a tab within "the window formerly known as Configure Desktop and Wallpaper." (The "Activity Settings" dialog box is accessible by pressing meta+q and clicking "configure".)

One last thing: This is my first post on the KDE Forums, and my first time using KDE Plasma. I'm currently using a live ISO to test out Plasma's features on my laptop while I wait for PC parts to arrive. It's possible that "changes to Desktop Folder Settings get applied to the current activity" is a bug; leaving and signing back in causes some (not all) wallpapers to reset to default, and picks one of my Mouse Actions settings apply globally instead of per activity. I won't formally file it as a bug because I'm running an out-of-date version of Kubuntu.

Please limit your Brainstorm suggestions to one entry, else this is impossible to handle.
As for bug reports: those belong to https://bugs.kde.org, the forum is the wrong place for bug report.