As show in this screen shot, the selected folder is not in the view. It needs to be scrolled down to view the selected folder.
dlgFolder.RootFolder = Environment.SpecialFolder.DesktopDirectory;
is not the same as
dlgFolder.RootFolder = Environment.SpecialFolder.Desktop;
What's the difference between SpecialFolder.Desktop and SpecialFolder.DesktopDirectory?
The thread linked indicates that as a path, they do get the same result. But they are not the same, as one is a logical path and the other is a physical path.
I have found when either one is assigned to the RootFolder of the open folder dialog, the resulting behavior can be different.
As a .RootFolder assignment, some versions of windows, like win7, treat either one as "Desktop". That is, you can see the "Computer" sub-entry, and open that to see the individual drive letters. The .SelectedPath gets selected either way, but the selected path is only made visible when the logical path of the desktop is assigned to the .RootFolder.
Worse, when using the browse folder dialog in win10 pre-release, it appears that "DesktopDirectory" as just that, the contents of the Desktop Directory only, with no link whatsoever to the logical desktop directory. And not listing any sub-items under it. Very frustrating if an app written for win7 is trying to be used with win10.
I think the problem the OP is having is that they employed the physical desktop as the root, when they should have employed the logical desktop.
I don't have an explanation for why the OP's two different machines respond differently. I would speculate that they have two different versions of the .NET framework installed.
The fact that win10 prerelease has the "Stuck on Desktop" issue with the browse folder dialog may be due to the more recent .NET framework shipped with win10 prerelease. Unfortunately, I remain ignorant of all the facts in this (win10) case, as I have not updated yet.
P.S. I found that win8 also experiences the "Stuck on Desktop" symptom:
https://superuser.com/questions/869928/windows-8-1-folder-selection-dialog-missing-my-computer-and-sub-items
The workaround there was to select the alternate GUI in win8. Perhaps something similar can be done in win10 prerelease.