are you using wayland by any chance? What desktop are you running?
Under Wayland it seems like the "Desktop" button never shows at all. The behaviour in the bug report is when running "Gnome on Xorg" (which I think is running X natively)
Nothing extracted yet.
Steam build: Oct 19, package versions 1508465769
Distribution: Arch
Graphics driver: NVidia 387.12
System Information: https://gist.github.com/usedbytes/3c1ecbef13b4ccd7f23cfd5712f0c85f
Steam client beta: Yes
SteamVR beta: Yes
System updated: Yes
Despite continual flakiness (crashes, hangs etc), when I do eventually manage to get SteamVR running and open the system menu, selecting the "Desktop" option doesn't show an image of the desktop.
It seems like the surface is just transparent - the "laser" from the controller terminates where the desktop surface would be, and moving the controller moves the mouse cursor on the PC monitor, as well as clicking etc. but there's no visible image of the desktop (just whatever app is running behind the system menu - e.g. SteamVR Home)
I've rebooted a couple of times, and it's reproducible - either nothing works at all, or I manage to get in to the system menu and the desktop doesn't show.