Unable to change background in mate desktop

I have the same problem.

A quick workaround could be to use feh:

feh --bg-scale <imagefile.jpg>

Another solution which doesn't need feh is the following.

It seems that the desktop wallpaper is stuck with the login background. So, you can change the login background and the only thing you need after that is logging out and in again (not restarting).

Changing the login background is done via update-alternatives (if anyone knows a better way, please tell me). As root user you have to issue two commands from the command line:

update-alternatives --install /usr/share/images/desktop-base/login-background.svg desktop-login-background /absolute/path/of/your/image 50
update-alternatives --set desktop-login-background /absolute/path/of/your/image

Then log out and log back in and the wallpaper will be the one you selected. This is what worked for me at least, when I wasn't aware of that question; I wish I were. Hopefully the bug will be fixed, so that's for the impatient I guess.

Bug fixed: After the last update, the problem is fixed, so you can now change the background from the relevant menu and it should work as expected (worked for me at least).