I uninstalled (purge) and reinstalled Nemo but I don't think that has any implication on the following because the same observation remains. However, I noticed the copy error isn't uniformly applied. The problem seems to only occur in one type of copy.
Problem: Desktop -> Open folder.
- Desktop -> Desktop
- Open folder -> Desktop
- Open folder -> Open folder.
I'm going to mark A's last suggestion as solution since all those changes are still in my system and I don't plan to remove them. Pretty sure they helped me to get to this state which I am happy to live with.