Comment 9 for bug 1333013

Oh actually the overly verbose lxsession run.log came in some useful data. Lxshortcut for a multiuser system puts a .desktop file in ~/usr/.local/applications/abiwor.desktop and creates a file if it does not exist. If this file does not exist then lxshortcut creates the file but not the directory.

In the live session the ~/usr/.local/applications is not an existing directory in the live session.

I have found a workaround that is fairly easy in terminal cd ~/.local/share/ && mkdir applications. Then right click from the menu and it will launch lxshorcut and create the file.