Comment 27 for bug 1197075

@Sparhawk:
They are not hardcoded. The actual location used is not ~/Pictures, but $(xdg-user-dir PICTURES), i.e. it uses the XDG standard pictures folder, which you can relocate using Ubuntu Tweak or a similar tool, or by editing some config files - read here https://wiki.archlinux.org/index.php/Xdg_user_directories.

Additionally, this behaviour can be tweaked using Variety's standard method for tweaking DE-specific stuff - by editing ~/.config/variety/scripts/set_wallpaper.