Hmm, so it would seem. Well, assuming it's not because the macro is in a Finder-specific macro group and the Finder isn't the active app when you run the macro (in that gif at least, it looks like that Desktop window is in the background) it may be worth trying the Assistance option from the KM Help menu, and/or verifying that the token is working correctly by trying it with a Set Variable to Text action:
It'd be nice but short of a clean OS install (which may or may not help) it doesn't look like this is going to happen unless you have some other secret sauce...
AND, I learned that there is a token to specify a Finder location, learned how to test this token, figured out that right clicking on a KM action let's me copy it as an image and paste it here which is much easier and quicker than taking screenshots and dragging them over, and used the Assistance option for the first time.
Apologies for the curt reply, as I'm a bit strapped for time at the moment, but at least in regards to your recreation of my test, I can tell you that you included an errant space in front of the token, which is enough to prevent it from working correctly:
The fact that the token worked as expected with the variable on your system shows that there's no reason it shouldn't also work to copy files, which means there must be some other mistake at work. One idea: I noticed the full path of the file you want to copy is long enough that it isn't fully visible in your screenshots. Is it possible there's an error in that file's path?