Yep there's an issue in Tauon that it doesn't read the environment variable overrides for these. Ive committed a fix for this now.

Tauon does already read the settings from ~/.config/user-dirs.dirs. Could you check what those are set to on your system?

user-dirs.dirs is in fact wrong. I'm fairly sure the user-dirs.dirs file is ancient and has never been updated/configured correctly.

XDG_DESKTOP_DIR="$HOME/Desktop"
XDG_DOWNLOAD_DIR="$HOME/"
XDG_TEMPLATES_DIR="$HOME/Templates"
XDG_PUBLICSHARE_DIR="$HOME/"
XDG_DOCUMENTS_DIR="$HOME/Documents"
XDG_MUSIC_DIR="$HOME/"
XDG_PICTURES_DIR="$HOME/"
XDG_VIDEOS_DIR="$HOME/"

However this is my environment

export XDG_STATE_HOME=$HOME/.local/state
export XDG_DATA_HOME=$HOME/.local/share
export XDG_CACHE_HOME=$HOME/.cache
export XDG_DATA_DIRS=/usr/local/share:/usr/share
export XDG_CONFIG_HOME=$HOME/.config
export XDG_CONFIG_DIRS=/etc/xdg/autostart
export XDG_DESKTOP_DIR="$HOME/Desktop"
export XDG_DOCUMENTS_DIR="$HOME/Documents"
export XDG_DOWNLOAD_DIR="$HOME/Downloads"
export XDG_MUSIC_DIR="$HOME/Music"
export XDG_PICTURES_DIR="$HOME/Pictures"
export XDG_PUBLICSHARE_DIR="$HOME/Public"
export XDG_TEMPLATES_DIR="$HOME/Templates"
export XDG_VIDEOS_DIR="$HOME/Videos"

This article mentions how those are set https://wiki.archlinux.org/title/XDG_user_directories, but yeah next release of Tauon it should read these from the environment variables as first priority.

Yeah there is no xdg-user-dirs update service on my machine. Looks like the only bits of that installed are because of Steam dependencies.

As a laugh xdg-user-dirs-update --force
No default user directories

@Taiko2k If you happen to know from the top of your head what's left to do here, could you describe it?

If not, don't bother, I'll have to go through the code and docs myself anyway.

I'll likely implement this in the next couple of days, as I cornered myself in my devel branch and need working XDG_DATA_HOME at minimum to proceed.

Just dropping this here so I don't have to look it up again:
https://wiki.archlinux.org/title/XDG_Base_Directory#User_directories
https://specifications.freedesktop.org/basedir-spec/latest/